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    Forecasted Dividend Payout (Multichoice)

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    Blease Inc. 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%

    © BrainMass Inc. brainmass.com June 3, 2020, 8:34 pm ad1c9bdddf
    https://brainmass.com/business/capital-budgeting/forecasted-dividend-payout-multichoice-143907

    Solution Preview

    Blease Inc. has a capital budget of $625,000, and it wants to maintain a target capital structure of 60% debt and 40% equity.

    The company ...

    Solution Summary

    Solution shows the computation of dividend payout ratio briefly and clearly.

    $2.19

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