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How large should Wei dividend payout ratio be next year

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Reference no: EM132733300

Problem - The Wei Corporation expects next year's net income to be $15 million. The firm is currently financed with 40% debt. Wei has $12 million of profitable investment opportunities, and it wishes to maintain its existing debt ratio. According to the residual distribution model (assuming all payments are in the form of dividends), how large should Wei's dividend payout ratio be next year?

Reference no: EM132733300

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