ABC, Inc Has 25,000 Shares of Stock Outstanding at a Market

ABC, Inc. has 25,000 shares of stock outstanding at a market price of $20. The firm has $500,000 in outstanding debt. Earnings for next year are projected at $100,000. The firm plans on spending $120,000 on capital projects next. The firm also maintains a constant debt-equity ratio. What is the projected dividend amount per share if the firm follows a residual dividend policy?

A) $0
B) $.20
C) $.60
D) $1.20
E) $1.60