Grandin Inc

question 10

Multiple Choice

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%

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