Getler Inc.'s projected capital budget is $2,000,000, its target capital structure is 40% debt and 60% equity, and its forecasted net income is $1,000,000. If the company follows a residual dividend policy, how much dividends will it pay or, alternatively, how much new stock must it issue? Dividends Stock Issued
A. $514,425 $162,901
B. $541,500 $171,475
C. $570,000 $180,500
D. $600,000 $190,000
E. $ 0 $200,000
Answer: E
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