Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Austin Grocers recently reported the following 2019 income statement (in millions of dollars): $700 Sales Operating costs including depreciation 500 EBIT $200 Interest EBT $160

image text in transcribed

Austin Grocers recently reported the following 2019 income statement (in millions of dollars): $700 Sales Operating costs including depreciation 500 EBIT $200 Interest EBT $160 Taxes (25%) Net income $120 Dividends $40 Addition to retained earnings $80 For the coming year, the company is forecasting a 35% 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. a. What is Austin's projected 2020 net income? Enter your answer in millions. For example, an answer of $13,000,000 should be entered as 13. Round your answer to two decimal places. $ 182,62 million b. What is the expected growth rate in Austin's dividends? Do not round intermediate calculations. Round your answer to two decimal places. 15.35 %

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

Step: 3

blur-text-image

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

Global Finance

Authors: Robert Holton

1st Edition

0415619165, 978-0415619165

More Books

Students also viewed these Finance questions

Question

How does selection differ from recruitment ?

Answered: 1 week ago

Question

4. How is culture a contested site?

Answered: 1 week ago