Find how much in dividends if any will pay

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Problem 1: David Rose Inc. forecasts a capital budget of $500,000 next year with forecasted net income of $400,000. The company wants to maintain a target capital structure of 30% debt and 70% equity. If the company follows the residual dividend policy, how much in dividends, if any, will it pay?

Option a. $45,125

Option b. $42,869

Option c. $50,000

Option d. $47,500

Option e. $52,500

Reference no: EM132613721

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