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 ...

2 952500 By using the following formula we can determine the net income Dividend ...

Ting Technology has a capital budget of $850,000, it wants to maintain a target capital structure of

Question:

Ting Technology has a capital budget of $850,000, it wants to maintain a target of 35% debt and 65% equity, and it also wants to pay a of $400,000. If the company follows a residual policy, how much net income must it earn to meet its requirements and pay the all while keeping its in balance?
1. $904,875
2. $952,500
3. $1,000,125
4. $1,050,131
5. $1,102,638
Capital Budgeting
Capital budgeting is a practice or method of analyzing investment decisions in capital expenditure, which is incurred at a point of time but benefits are yielded in future usually after one year or more, and incurred to obtain or improve the... Capital Structure
Capital structure refers to a company’s outstanding debt and equity. The capital structure is the particular combination of debt and equity used by a finance its overall operations and growth. Capital structure maximizes the market value of a... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...