Question
Austin Grocers recently reported the following 2019 income statement (in millions of dollars): Sales $700 Operating costs including depreciation 500 EBIT $200 Interest 40 EBT
Austin Grocers recently reported the following 2019 income statement (in millions of dollars):
Sales $700 Operating costs including depreciation 500 EBIT $200 Interest 40 EBT $160 Taxes (25%) 40 Net income $120 Dividends $40 Addition to retained earnings $80
For the coming year, the company is forecasting a 15% increase in sales, and it expects that its year-end operating costs, including depreciation, will equal 75% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant.
- What is the expected growth rate in Austin's dividends? Do not round intermediate calculations. Round your answer to two decimal places.
%
| Austin Grocers recently reported the following 2019 income statement (in millions of dollars):
For the coming year, the company is forecasting a 15% increase in sales, and it expects that its year-end operating costs, including depreciation, will equal 75% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant.
|
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen, Peter Brewer
16th edition
978-1259307416
