Walsh Company is considering three independent projects, each of which requires a $ 6 million investment. The
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Question:
Walsh Company is considering three independent projects, each of which requires a $ million investment. The estimated internal rate of return IRR and cost of capital for these projects are presented here:
Project H high risk: Cost of capital IRR
Project M medium risk: Cost of capital IRR
Project L low risk: Cost of capital IRR
Note that the projects' costs of capital vary because the projects have different levels of risk. The company's optimal capital structure calls for debt and common equity, and it expects to have net income of $ If Walsh establishes its dividends from the residual dividend model, what will be its payout ratio? Round your answer to two decimal places.
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