problem: Ronaldo Inc. has a capital budget of $1,000,000, but it wants to maintain a target capital structure of 60 percent debt and 40 percent equity. The company forecasts this year’s net income to be $600,000. If the company follows a residual dividend policy, find out its dividend payout ratio?
[A] 25.00%
[B] 33.33%
[C] 35.00%
[D] 16.67%
[E] 20.00%