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Question
Grandin Inc. is evaluating its dividend policy. It has a capital budget of $625,000, and it wants to maintain a target capital structure of 60% debt and 40% equity. The company forecasts a net income of $475,000. If it follows the residual dividend policy, what is its forecasted dividend payout ratio?a. 40.61%
b. 42.75%
c. 45.00%
d. 47.37%
e. 49.74%
Answer
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