The Capital Budget Forecast for the Santano Company Is $725,000 $\text { Net Income Payout }$

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 $500,000.If the company follows the residual dividend policy, how much income must it earn, and what will its dividend payout ratio be? $\text { Net Income Payout }$

A) $\$ 898,750 \quad 55.63 \%$
B) $\$ 943,688 \quad 58.41 \%$
C) $\$ 990,872 \quad 61.34 \%$
D) $\$ 1,040,415 \quad 64.40 \%$
E) $\$ 1,092,436 \quad 67.62 \%$