Debt and internal equity without giving any dividends

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Reference no: EM13911619

Worst Plumbers Inc. wants to maintain a target capital structure with 33% debt and 67% equity. Its forecasted net income is $500,000. If the firm follows the residual dividend policy, what is the maximum capital budget that is consistent with maintaining the target capital structure? Note, that it is the maximum capital budget the company can fund through debt and internal equity without giving any dividends this year or issuing new equity.

$673,652

$709,107

$746,269

$789,720

$825,000

Reference no: EM13911619

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