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Austin Grocers recently reported the following 2016 income statement (in millions of dollars): Sales $700 Operating costs including depreciation 500 EBIT $200 Interest 40 EBT
Austin Grocers recently reported the following 2016 income statement (in millions of dollars):
Sales $700
Operating costs including depreciation 500
EBIT $200
Interest 40
EBT $160
Taxes (40%) 64
Net income $96
Dividends $32
Addition to retained earnings $64
For the coming year, the company is forecasting a 30% increase in sales, and it expects that its year-end operating costs, including depreciation, will equal 70% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant.
- What is Austin's projected 2017 net income?
- What is the expected growth rate in Austin's dividends? Do not round your intermediate calculations. Round your answer to two decimal places.
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