Question: QUESTION 25 Big Bug Inc. wants to maintain a target capital structure with 30% debt and 70% equity. Its forecasted net income is $550,000, and

QUESTION 25 Big Bug Inc. wants to maintain a target capital structure with 30% debt and 70% equity. Its forecasted net income is $550,000, and its board of directors has decreed that no new stock can be issued during the coming year. If the firm follows the residual dividend model, what is the maximum capital budget that is consistent with maintaining the target capital structure? O a. $673,652 Ob. $709,107 OC. $746,429 O d. $785,714 Oe. $825,000 QUESTION 26 If a firm takes actions that reduce its days sales outstanding (DSO), then, other things held constant, this will lengthen its cash conversion cycle (CCC) and cause a deterioration in its cash position, True False

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