David Rose Inc. forecasts a capital budget of $500,000 next year with a forecasted net income of $425,000. The company wants to maintain a target capital structure of 30% debt and 70% equity. If the company follows the residual dividend policy, how much in dividends if any, will it pay? Select the correct answer.

a. $75,000

b. $74,806

c. $74,709

d. $75,097

e. $74,903