Residual dividend policy As president of​ Young's of​ California, a large clothing​ chain, you have just received a le

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Residual dividend policy   As president of​ Young's
of​ California, a large clothing​ chain, you have just
received a letter from a major stockholder. The stockholder asks
about the​ company's dividend policy. In​ fact, the
stockholder has asked you to estimate the amount of the dividend
that you are likely to pay next year. You have not yet collected
all the information about the expected dividend​ payment, but
you do know the​ following:
​(1) The company follows a residual dividend policy.
​(2) The total capital budget for next year is likely to be one
of three​ amounts, depending on the results of capital
budgeting studies that are currently under way. The capital
expenditure amounts are ​$2.4 million, ​$3.4 ​million, and ​$4.4
million.​(3) The forecasted level of potential retained earnings
next year is ​$2.4 million.​(4) The target or optimal capital
structure is a debt ratio of
45​%. You have decided to respond by sending the stockholder the
best information available to you.
a.  Compute the amount of the dividend​ (or the amount of
new common stock​ needed) and the dividend payout ratio for
each of the three capital expenditure amounts.
b.  ​Compare, contrast, and discuss the amount of
dividends​ (calculated in part a​) associated with each of the
three capital expenditure amounts.