In your discussions with the CFO you have talked about the impact of a dividend on your companys 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. Concept Check: Dividends are distributions of profits to your investors who placed their capital at risk for you. Theoretically every company should eventually provide a dividend distribution to their investors.

ACME's Financial Statements
	2014	2015	Change
Total Assets	435,750,000.00	459,225,000.00	23,475,000.00
Average Total Assets		447,487,500.00
Common Stock	122,000,000.00	122,000,000.00	-
Preferred Stock	16,725,000.00	16,725,000.00	-
Accumulated Retained Earnings	27,001,000.00	31,698,000.00	4,697,000.00
Total Owner's Equity	165,726,000.00	170,423,000.00	4,697,000.00
Net Income		7,045,000.00