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The capital budget forecast for the Santano Company is $725,000. The CFO wants to maintain a target capital structure of 45% debt and 55% equity,
The capital budget forecast for the Santano Company is $725,000. The CFO wants to maintain a target capital structure of 45% debt and 55% equity, and it also wants to pay dividends of $675,000. If the company follows the residual dividend policy, how much income must it earn, and what will its dividend payout ratio be? Select the correct answer. a. NI=$1,074,430 Payout =62.90% b. NI=$1,075,110 Payout =62.94% C NI =$1,073,750 Payout =62.86% d NI=$1,074,090 Payout =62.8896 e. NI=$1,074,770 Payout =62.92%
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