McCann Publishing has a target capital structure of 35% debt and 65% equity. This year's capital budgets S850,000 and it wants to pay a dividend of $400,000. If the company follows a residual dividend policy, how much net income must it earn to meet its capital budgeting requirements and pay the dividend, all while 7 eeping its capital structure in balance? a. $904,875 b. $952,500 c. $1,000,125 d. $1,050,131 e. $1,102,638