Ring Technology Has a Capital Budget of $850,000,it Wants to Maintain

question 75

Multiple Choice

Ring 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 the residual dividend model,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?

• A)$ 904,875
• B)$ 952,500
• C)$1,000,125
• D)$1,050,131
• E)$1,102,638

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