Company follows a residual dividend policy

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Reference no: EM131600399

The capital budget of Creative Ventures Inc. is $1,000,000. The company wants to maintain a target capital structure that is 30% debt and 70% equity. The company forecasts that its net income this year will be $800,000. If the company follows a residual dividend policy, what will be its total dividend payment?

a. $100,000

b. $200,000

c. $300,000

d. $400,000

e. $500,000

Reference no: EM131600399

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