Company follows the residual dividend model

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Reference no: EM131551099

Mortal Inc. expects to have a capital budget of $450,000 next year. The company wants to maintain a target capital structure with 35% debt and 65% equity, and its forecasted net income is $400,000. If the company follows the residual dividend model, how much in dividends, if any, will it pay?

a. $84,925

b. $105,350

c. $87,075

d. $101,050

e. $107,500

Reference no: EM131551099

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