Pavlin Corp.'s projected capital budget is $2,000,000, its target capital structure is 40% debt and 60% equity, and its forecasted net income is $900,000. If the company follows the residual dividend model, how much dividends will it pay or, alternatively, how much new stock must it issue?
a. $462,983; $244,352
b. $513,000; $270,750
c. $487,350; $257,213
d. $540,000; $285,000
e. $ 0; $300,000