1. Trenton, Inc. has a capital budget of $1,500,000. It wants to maintain a target capital structure of 40% debt and 60% equity. The company forecasts a net income of $1,200,000. If it follows a residual dividend policy, what is its forecasted dividend payout ratio?

2. A recent offering of Talmot Corporation stock was underwritten by Advantage Securities. The terms were: Price to public $10 per share and 10 million shares. Proceeds to the company depend on the price per share and how many shares are sold. The investment banker incurred expenses of $1.5 million and the company incurred expenses of $1 million. This is an example of a

a. Best efforts deal

b. Hybrid deal

c. Negotiated deal

d. Not enough information to determine

e. None of the above