1.Cold Goose is able to achieve this level of increase sales, but its interest cost increased from 10% to 15% of earnings before interest and taxes (EBIT).

2. The company's operating cost (excluding depreciation and amortization) remain at 60% of net sales, and its depreciation and amortization expenses remain constant from year to year.

3. The company's tax rate remains constant at 40% of its pre-tax income or earnings before taxes (EBT).

4.In year 2, Cold Goose expects to pay $150,000 and 1,466,250 of preferred and common stock dividends, respectively.

what would be a 2 year income statement for Cold Goose

Year 1 year2

Net sales $25,000,000

Less: operating cost, except depreciation and amortization 15,000,000

Less : depreciation and amortizationexpenses1,000,000 1,000,000

Operating income (EBIT)9,000,000

Less: interest expense900,000

Pre-tax income (EBT)8,100,000

Less taxes (40%)3,240,000

Earnings after taxes4,860,000

Less preferred stock dividend150,000

Earnings available to common stock shareholders 4,710,000

Less: common stock dividend1,215,000

Contributions to retained earnings3,495,000 4,248,750

-In year 2 if Cold Goose has 10,000 shares of preferred stock issued and outstanding, then preferred share should expect to receive______ in annual dividends.

-If Cold Goose has 200,000 shares of common stock issued and outstanding, then the firm's earnings per share EPS is expected to change from _____ in year 1 to _____ in year 2

-Cold Goose before interest, taxes depreciation and amortization EBITDA value changed from __________ in year 1 to ________ in year 2