Brock Brothers wants to maintain its capital structure which is 30 percent debt and 70 percent equity. The company forecasts that its net income this year will be $1,000,000. The company follows a residual distribution policy and anticipates a dividend payout ratio of 40 percent. What is the size of the companys capital budget?

a) $600,000

b) $857,143

c) $1,000,000

d) $1,428,571

e) $2,000,000