Norton Electrical has quite a few positive NPV projects from which to choose. The problem is that it has more of these projects than it can finance without issuing new stock and the board of directors refuses to issue any new shares in the foreseeable future. Norton's projected net income is $180 million, its target capital structure is 25% debt and 75% equity, and its target payout ratio is 65%. The CFO now wants to determine how the maximum capital

Select the correct answer.

a. If increase debt $165.6 If lower payout $106.1 If do both $490.1

b. If increase debt $170.4 If lower payout $109.9 If do both $493.9

c. If increase debt $169.2 If lower payout $109.0 If do both $492.9

d. If increase debt $168.0 If lower payout $108.0 If do both $492.0

e. If increase debt $166.8 If lower payout $107.1 If do both $491.0