Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

6. Kenny Corporation recently reported the following income statement for 2001 (numbers are in millions of dollars): Sales Operating costs EBIT Interest Earnings before taxes

image text in transcribed
image text in transcribed
6. Kenny Corporation recently reported the following income statement for 2001 (numbers are in millions of dollars): Sales Operating costs EBIT Interest Earnings before taxes (EBT) Taxes (40%) Net income available to common shareholders $7,000 3,000 $4,000 200 $3,800 520 $2,280 The company forecasts that its sales will increase by 10 percent in 2002 and its operating costs will increase in proportion to sales. The company's interest expense is expectedto remain at $200 million, and the tax rate will remain at 40 percent. The company plans to pa out 50 percent of its net income as dividends, the other 50 percent will be additions to retained earnings. What is the forecasted addition to retained earning for 2002? a. $1,140 b. $1,260 c. $1,440 d. $1,790 e. $1,810

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Sport Finance

Authors: Gil Fried, Timothy D. DeSchriver, Michael Mondello

3rd Edition

1450421040, 978-1450421041

More Books

Students also viewed these Finance questions

Question

Be able to explain the concept of constructive discharge

Answered: 1 week ago