Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kenney Corporation reported the following income statement for the most recent year(numbers are in millions of dollars) Sales Total operating costs EBIT Interest Earnings before

image text in transcribed
Kenney Corporation reported the following income statement for the most recent year(numbers are in millions of dollars) Sales Total operating costs EBIT Interest Earnings before tax (EBT) Taxes (40%) Net income available to common shareholders $7.000 3.000 $4,000 200 $3,800 1.520 $2.280 The company forecasts that its sales will increase by 10 percent in the next year and its operating costs will increase in proportion to sales. The company's interest expense is expected to remain at $200 million, and the tax rate will remain at 40 percent. The company plans to pay out 50 percent of its net income as dividends, the other 50 percent will be additions to retained earnings. What is the forecasted addition to retained camnings for the next year! O $1,440 O $1,790 O S1,260 S1,810 $1,140

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

Cases In Healthcare Finance

Authors: Louis C. Gapenski

3rd Edition

1567932444, 9781567932447

More Books

Students also viewed these Finance questions

Question

How do media shape our thinking?

Answered: 1 week ago

Question

Describe Elizabeths credibilityinitial, derived, and terminal.

Answered: 1 week ago