Getler Inc.'s projected capital budget is $2,000,000, its target capital structure is 40% debt and 60% equity,
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Question:
Getler Inc.'s projected capital budget is $2,000,000, its target capital structure is 40% debt and 60% equity, and its forecasted net income is $1,125,000. If the company follows a residual dividend policy, how much dividends will it pay or, alternatively, how much new stock must it issue?
Select the correct answer.
a. Dividends $466
Stock issued $75,466b. Dividends $350
Stock issued $75,350c. Dividends $117
Stock issued $75,117d. Dividends $233
Stock issued $75,233e. Dividends $0
Stock issued $75,000
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