Quantitative Problem: Lane Industries is considering three independent projects, each of which requires a $2.6 million investment. The estimated internal rate of return (IRR) and cost of capital for these projects are presented here: Cost of capital 12% Project H (high risk): IRR = 14% Project M (medium risk): Cost of capital 8% IRR = 6% Project L (low risk): IRR = 8% Note that the projects' costs of capital vary because the projects have different levels of risk. The company's optimal capital structure calls for 40% debt and 60% common equity, and it expects to have net income of $3,700,000. If Lane establishes its dividends from the residual dividend model, what will be its payout ratio? Round your answer to 2 decimal places. Cost of capital 7%