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QUESTION
The capital budget forecast for the Santano Company is $725,000.
- The capital budget forecast for the Santano Company is $725,000. The CFO wants to maintain a target capital structure of 40% debt and 60% equity, and the company is estimated to earn a net income of $600,000. If the company follows the residual dividend policy, how much cash dividend can be distributed, and what will be its dividend payout ratio?
