In your discussions with the CFO you have talked about the impact of a dividend on your company's market price and financial statements. He has asked that you and your team evaluate the impact of issuing a dividend.

Use the income statement and balance sheet provided to make recommendation for the amount of dividend (if any). How are retained earnings impacted and what does this mean for the organization?

Compute the Internal Growth Rate and Sustainable Growth Rate using current (2015) financial information and then a second scenario; if we issue a dividend payment of $3 million.

Explain your thought process and rationale for a recommended dividend strategy.