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Chandler Communications' CFO has provided the following information: * The company's capital budget is expected to be $5,000,000.

Chandler Communications' CFO has provided the following information:

* The company's capital budget is expected to be $5,000,000.
* The company's target capital structure is 70 percent debt and 30
percent equity.
* The company's net income is $4,500,000.

If the company follows a residual dividend policy, what portion of its net income should it pay out as dividends this year?

a. 33.33%
b. 40.00%
c. 50.00%
d. 60.00%
e. 66.67%

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