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Boarder Industries plans to have a capital budget of $620,000. It wants to maintain a target capital structure of 45% debt and 55% equity, and
Boarder Industries plans to have a capital budget of $620,000. It wants to maintain a target capital structure of 45% debt and 55% equity, and it also wants to pay a dividend of $410,000. If the company follows the residual dividend model, how much net income must it earn to meet its investment requirements, pay the dividend, and keep the capital structure in balance?
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