Brock Brothers wants to maintain its capital structure which is 30 percent debt and 70...
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Finance
Brock Brothers wants to maintain its capital structure which is 30 percent debt and 70 percent equity. The company forecasts that its net income this year will be $1,000,000. The company follows a residual distribution policy and anticipates a dividend payout ratio of 40 percent. What is the size of the companys capital budget?
a) $600,000
b) $857,143
c) $1,000,000
d) $1,428,571
e) $2,000,000
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