Projected capital budget

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Reference no: EM131025505

Pavlin Corp.'s projected capital budget is $2,000,000, its target capital structure is 40% debt and 60% equity, and its forecasted net income is $900,000. If the company follows the residual dividend model, how much dividends will it pay or, alternatively, how much new stock must it issue?

a. $462,983; $244,352

b. $513,000; $270,750

c. $487,350; $257,213

d. $540,000; $285,000

e. $      0; $300,000

Reference no: EM131025505

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