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A firm has Net Income of $800,000, a capital budget of $2,000,000, and a target debt...

A firm has Net Income of $800,000, a capital budget of $2,000,000, and a target debt ratio of 70%. If the firm follows a residual dividend policy, then what is their payout ratio?

25%                b. 33%                        c. 40%                        d. 50%

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