Ring 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 the residual dividend model, how much net income must it earn to meet its capital budgeting requirements and pay the dividend, all while keeping its capital structure in balance? a. $ 904,875
b. $ 952,500
c. $1,000,125
d. $1,050,131
e. $1,102,638

b. $ 952,500

Explanation:

The computation of the amount of the net income for earning to meet out the requirement is shown below:

Dividend = Net income - Target Equity ratio × Total capital budget

$400,000 = Net income - 0.65 × $850,000

$400,000 = Net income - $552,500

So, the net income is

= $400,000 + $552,500

= $952,500

Hence the Net income is $952,500

Therefore the correct option is b. $952,500

answer; i believe the correct answer is (treasury bills);

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.