How much net income must it earn to meet its capital

Reference no: EM13279562

Nueva Tecnología has a capital budget of $8,500,000, it wants to maintain a target capital structure of 35% debt and 65% equity, and it also wants to pay a dividend of $4.000,000. 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: EM13279562

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