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}$ $ \text { 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. $\$ 1,092,436 \quad 67.62 \%$

Question

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}$  $ \text { 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. $\$ 1,092,436 \quad 67.62 \%$

Quizplus · Accepted Answer

The Answer of 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}$  $ \text { 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. $\$ 1,092,436 \quad 67.62 \%$

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

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