What is the expected dividend payout ratio

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Victor Corporation has a capital budget of $5 million and wants to maintain a capital structure of 40% debt and 60% equity. The company expects net income of $4 million. What is the expected dividend payout ratio if the company follows a residual dividend policy? 1. 50% 2. 40% 3. 20% 4. 25% 5. none of the above

Reference no: EM13275573

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