Giovanni Corp.'s projected net income is $375 million, its target capital structure is 30% debt and 70% equity, and its target payout ratio is 35%. Giovanni has more positive NPV projects than it can finance without issuing new stock, but its board of directors had decreed that it cannot issue any new shares in the foreseeable future. The CFO now wants

21 . Giovanni Corp.'S projected net income is $375. 0 million , it's target capital structure is 30% debt and 70% equity , and its target payout ratio is 35%. Giovanni has more positive NPV projects than it can finance without issuing new stock, but its board of directors had decreed that it cannot issue any new shares in the foreseeable future . The CFO now wants to determine how the maximum capital budget would be affected by changes in capital structure policy and/ or the target dividend payout policy . Versus the current policy , how much larger could the capital budget be if ( 1 ) the target debt ratio were raised to 70% , other things held constant , ( 2 ), the target payout ratio were lowered to 15% , other things held constant , and ( 3 ), the debt ratio and payout were both changed by the indicated amounts . AL. B. ( 1 ) 464.29) C D. ( 1 ) 460. 29 ( 1 ) 451. 69 ( 2 ) 107.14 111 . 14 ( 3 ) 714.29 ( 2 ) ( 1 ) 469. 69 ( 2 ) 103. 23 ( 2 ) 1 14.23 ( 3 ) 718. 29 ( 3 ) 709.69 ( 3 ) 702. 69