Residual dividend model-dividend payout ratio

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Residual dividend model

Axel Telecommunications has a target capital structure that consists of 60% debt and 40% equity. The company anticipates that its capital budget for the upcoming year will be $1,000,000. If Axel reports net income of $1,600,000 and it follows a residual dividend payout policy, what will be its dividend payout ratio? Round your answer to two decimal places.

Reference no: EM131549556

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