Pavlin Corp.'s projected capital budget is $2,000,000 its target capital structure is 40% debt and 60% equity,

Question:

Pavlin Corp.'s projected capital budget is $2,000,000 its target is 40% debt and 60% equity, and its forecasted net income is $1,000,000. If the company follows a residual policy, how much dividends will it pay or, alternatively, how much new stock must it issue?

Capital Structure
Capital structure refers to a company’s outstanding debt and equity. The capital structure is the particular combination of debt and equity used by a finance its overall operations and growth. Capital structure maximizes the market value of a... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...