Firm A has an expected capital budget of $100,000 for next year. The firm uses a target capital structure with a debt-to-equity ratio of 0.25. The projected net income for next year is expected to be $100,000. Using a residual dividend policy, how much will the firm expect to pay in dividends next year?
Select one:
a. $10,000
b. $25,000
c. $20,000
d. $0
