What is target capital structure-residual dividend policy

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Global Inc. has its own target capital structure that consists of debt and equity. The firm anticipates that its capital budget for the next year will be $1,500,000. If it reports net income of $1,200,000 and wants to maintain a 20% payout ratio, what is its target capital structure (%debt/%equity)? The firm follows a residual dividend policy. Show your work.

Reference no: EM13812269

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