Residual dividend payout policy


Axel Telecommunications has target capital structure which includes 60% debt and 40% equity. The company anticipates that its capital budget for the upcoming year will be $5,000,000. If Axel reports net income of $2,200,000 and it follows residual dividend payout policy, what will be its dividend payout ratio? Round your answer to two decimal places.

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Finance Basics: Residual dividend payout policy
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