Victor Rumsfeld Inc

Multiple Choice

Victor Rumsfeld Inc.'s dividend policy is under review by its board.Its projected capital budget is $2,000,000, its target capital structure is 60% debt and 40% equity, and its forecasted net income is $600,000.If the company follows a residual dividend policy, what total dividends, if any, will it pay out?

A) $240,000
B) $228,000
C) $216,600
D) $205,770
E) $0