The capital budget forecast for the Santano Company is $725,000. The CFO wants to maintain a target capital structure of 45% debt and 55% equity, and it also wants to pay dividends of $500,000. If the company follows the residual dividend policy, how much income must it earn, and what will its dividend payout ratio be? Net IncomePayout a. $ 943,68858.41% b. $1,092,43667.62% c. $ 990,87261.34% d. $ 898,75055.63% e. $1,040,41564.40%

The capital budget forecast for the Santano Company is $725,000. The CFO wants to maintain a target capital structure of 45% debt and 55% equity, and it also wants to pay dividends of $500,000. If the company follows the residual dividend policy, how much income must it earn, and what will its dividend payout ratio be? Net IncomePayout a. $ 943,68858.41% b. $1,092,43667.62% c. $ 990,87261.34% d. $ 898,75055.63% e. $1,040,41564.40%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter15: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 2P

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Question

a. $ 943,68858.41%

b. $1,092,43667.62%

c. $ 990,87261.34%

d. $ 898,75055.63%

e. $1,040,41564.40%

Leveraging special tenchniques in analyzing historical data to predict future trends. Forecasting covers the methods and types of forecasting and their application to case studies.

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