How much dividends will pay

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Problem 1: Getler Inc.'s projected capital budget is $2,000,000, its target capital structure is 40% debt and 60% equity, and its forecasted net income is $1,425,000. If the company follows a residual dividend policy, how much dividends will it pay or, alternatively, how much new stock must it issue?

a. Dividends $225,422
Stock issued $422

b. Dividends $225,563
Stock issued $563

c. Dividends $225,000
Stock issued $0

d. Dividends $225,281
Stock issued $281

e. Dividends $225,141
Stock issued $141

Reference no: EM132928804

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