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How much net income must earn to meet capital budgeting

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Reference no: EM132913946

Problem 1: Ring Technology has a capital budget of $450,000, it wants to maintain a target capital structure of 25% debt and 75% equity, and it also wants to pay a dividend of $225,000. If the company follows the residual dividend model, how much net income must it earn to meet its capital budgeting requirements and pay the dividend, all while keeping its capital structure in balance?

Reference no: EM132913946

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