Redwood Systems follows a strict residual dividend policy. The company estimates that its capital expenditures this year will be $40 million, its net income will be $30 million, and its target capital structure is 60 percent equity and 40 percent debt. What will be the company's dividend payout ratio?

Answer rating: 100% (QA)

To calculate the dividend payout ratio for Redwood Systems we need to determine the portion of net i... View the full answer