If the company follows a residual distributions model and


Orange Inc has a capital budget of 1.5 Million. The company is forecasting a target capital structure of 60% dept and 40% equity. The company is forecasting net income of 750,000. If the company follows a residual distributions model and pays all distributions as dividends what will be the company's payout ratio? Please show work.

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Finance Basics: If the company follows a residual distributions model and
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