Demo You, Inc. is expected to generate $180 million in net income over the next year. Demo You has forecasted a capital budget of $88 million, & it wishes to maintain its current capital structure of 70% debt & 30% equity. If the company follows a strict residual dividend policy and makes distributions in the form of dividends, what is its expected dividend payout ratio for this year?
a) 85.3%
b) 89.6%
c) 68.2%
d) 64.0%