What will be its payout ratio

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Problem - Petersen Company has a capital budget of $1.2 million. The company wants to maintain a target capital structure that is 60% debt and 40% equity. The company forecasts that its net income this year will be $600,000. If the company follows a residual distribution model and pays all distributions as dividends, what will be its payout ratio?

Reference no: EM132733303

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