A company follows a strict residual dividend policy. It has a capital budget of $3,000,000 and a target capital structure that consists of 30% debt and 70% equity. Net income is forecast to be $3.5mil. Calculate the expected dividend payout amount.

Select one:

a.

$1,400,000

b.

$2,100,000

c.

$3,000,000

d.

$900,000

e.

$2,450,000