Mortal Inc. expects to have a capital budget of $450,000 next year. The company wants to maintain a target capital structure with 35% debt and 65% equity, and its forecasted net income is $400,000. If the company follows the residual dividend model, how much in dividends, if any, will it pay?
a. $84,925
b. $105,350
c. $87,075
d. $101,050
e. $107,500