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Terrell Corp. has a capital budget of $6,000,000. The company's target capital structure is 45% debt and 55% equity. Its forecasted net income is $4,000,000.

Terrell Corp. has a capital budget of $6,000,000. The company's target capital structure is 45% debt and 55% equity. Its forecasted net income is $4,000,000. If the company follows a residual dividend policy, what total dividends, if any, will it pay out?

A. $0 $700,000

B. $1,300,000

C. $2,000,000

D. None of the above

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