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Question
Mortal Inc. expects to have a capital budget of $450,000 next year. The company wants to maintain a target capital structure with 35% debt and 65% equity, and its forecasted net income is $400,000. If the company follows the residual dividend model, how much in dividends, if any, will it pay?a. $101,050
b. $87,075
c. $84,925
d. $107,500
e. $105,350
Answer
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