QUESTION 5: Dentaltech Inc. projects the following data for the coming vear. If the firm follows the residual dividend policy and also maintains its target capital structure, what will its payout ratio be? EBIT $2,000,000 Capital budget % Debt % Equity rate $1,200,000 40% Interest rate Debt outstanding Shares outstanding 10% S5,000,000 5,000,000 60% 40% If the firm follows the residual dividend policy and also maintains its target capital a) structure, what will its payout ratio be? (8 marks) If the firm follows the constant dividend payout policy paying 30% of earnings as b) dividends, does it has sufficient retained earnings to finance the equity portion of the capital budget? (5 marks) If Dentaltech wants to minimize its weighted average cost of capital, which of these two c) polices should it pursue? Explain. (2 marks) C409ps) - 19,0) [Total: 15 marks] QUESTION 6