Please provide problem with accounting question ABC Inc. has a capital budget of $4 million. The firm's target capitalstructure consists of 60% debt. The company is forecasting a net income of$2,000,000 for the year.Following the residual distribution model and paying all distributions asdividends, what will be the payout ratio?A. 10%B. 20%C. 30%D. 40%

Step 1: Definition of Payout RatioThe payout ratio is the proportion of earnings paid out as…

Answered: ABC Inc. has a capital budget of $4…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 11P

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