Randy Corporation has a capital budget of 226.0 and and a Net Income of 13.0. If Randy\'s target equity fraction is 0.3, what should Randy\'s dividend be under the residual dividend model? Solution Capital Budget = 226.0 Net Income = 13.0 Equity Ratio = 0.30 Dividend = Net Income - Capital Budget * Equity Ratio Dividend = 13.0 - 226.0 * 0.30 Dividend = 13.0 - 67.80 Dividend = -54.80.