The capital budget forecast for the Santano Company is $725,000. The CFO wants to maintain a target capital structure of 45% debt and 55% equity, and it also wants to pay dividends of $625,000. If the company follows the residual dividend policy, how much income must it earn, and what will its dividend payout ratio be? Select the correct answer. a. NI = $1,023,750 Payout = 61.05% b. NI = $1,023,430 Payout = 61.01% c. NI = $1,022,470 Payout = 60.89% d. NI = $1,022,790 Payout = 60.93% e. NI = $1,023,110 Payout = 60.97%

    Answer: Option-(a): Net Income Dividend payout reference $1,023,750 61.05% Workings: As it is abandoned that the corporation follows the