Brooks Sporting Inc is prepared to report the following 2021 income statement (shown in thousands of dollars) Sales $13,300 Operating costs including depreciation 9,709 EBIT $3,591 Interest 231 EBT $3,360 Taxes (25 ) 840 Net income $2,520 Prior to reporting this income statement, the company wants to determine its annual dividend The company has 470,000 shares of common stock outstanding, and its stock trades at $38 per share The company had a 25 dividend payout ratio in 2020 If Brooks wants to maintain this payout ratio in 2021, what will be its per share dividend in 2021 Do not round intermediate calculations Round your answer to the nearest cent If the company maintains this 25 payout ratio, what will be the current dividend yield on the company's stock Do not round intermediate calculations Round your answer to two decimal places The company reported net income of $2 3 million in 2020 Assume that the number of shares outstanding has remained constant What was the company's per share dividend in 2020 Do not round intermediate calculations Round your answer to the nearest cent As an alternative to maintaining the same dividend payout ratio, Brooks is considering maintaining the same per share dividend in 2021 that it paid in 2020 If it chooses this policy, what will be the company's dividend payout ratio in 2021 Do not round intermediate calculations Round your answer to two decimal places Assume that the company is interested in dramatically expanding its operations and that this expansion will require significant amounts of capital The company would like to avoid transaction costs involved in issuing new equity Given this scenario, would it make more sense for the company to maintain a constant dividend payout ratio or to maintain the same per share dividend OPTION 1 Since the company would like to avoid transaction costs involved in issuing new equity, it would be best for the firm to maintain the same per share dividend OPTION 2 Since the company would like to avoid transaction costs involved in issuing new equity, it would be best for the firm to maintain a constant dividend payout ratio

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Posted on Sep 07, 2024

Brooks Sporting Inc. is prepared to report the following 2021 income statement (shown in thousands of dollars). Sales $13,300 Operating costs including depreciation 9,709 EBIT

Brooks Sporting Inc. is prepared to report the following 2021 income statement (shown in thousands of dollars).

Sales	$13,300
Operating costs including depreciation	9,709
EBIT	$3,591
Interest	231
EBT	$3,360
Taxes (25%)	840
Net income	$2,520

Prior to reporting this income statement, the company wants to determine its annual dividend. The company has 470,000 shares of common stock outstanding, and its stock trades at $38 per share.

The company had a 25% dividend payout ratio in 2020. If Brooks wants to maintain this payout ratio in 2021, what will be its per-share dividend in 2021? Do not round intermediate calculations. Round your answer to the nearest cent.
If the company maintains this 25% payout ratio, what will be the current dividend yield on the company's stock? Do not round intermediate calculations. Round your answer to two decimal places.
The company reported net income of $2.3 million in 2020. Assume that the number of shares outstanding has remained constant. What was the company's per-share dividend in 2020? Do not round intermediate calculations. Round your answer to the nearest cent.
As an alternative to maintaining the same dividend payout ratio, Brooks is considering maintaining the same per-share dividend in 2021 that it paid in 2020. If it chooses this policy, what will be the company's dividend payout ratio in 2021? Do not round intermediate calculations. Round your answer to two decimal places.
Assume that the company is interested in dramatically expanding its operations and that this expansion will require significant amounts of capital. The company would like to avoid transaction costs involved in issuing new equity. Given this scenario, would it make more sense for the company to maintain a constant dividend payout ratio or to maintain the same per-share dividend?
1. OPTION 1: Since the company would like to avoid transaction costs involved in issuing new equity, it would be best for the firm to maintain the same per-share dividend
2. OPTION 2: Since the company would like to avoid transaction costs involved in issuing new equity, it would be best for the firm to maintain a constant dividend payout ratio.