Residual Dividend Policy Worthington AG has declared an annual dividend of 0.80 Swiss francs (SwFr) per share. For the year just ended, earnings were SwFr7 per share.
a. What is Worthington's payout ratio?
b. Suppose Worthington has 7 million shares outstanding. Borrowing for the coming year is planned at SwFr18 million. What are planned investment outlays assuming a residual dividend policy? (See Question 11) What target capital structure is implicit in these calculations?