If the company follows a residual dividend policy how much, Ask an Expert

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Ting Technology has a capital budget of $850,000, it wants to maintain a target capital structure of 35% debt and 65% equity, and it also wants to pay a dividend of $400,000. If the company follows a residual dividend policy, how much net income must it earn to meet its capital budgeting requirements and pay the dividend, all while keeping its capital structure in balance?

$904,875

$952,500

$1,000,125

$1,050,131

$1,102,638

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