Normal 19 Title conting A A 21 Font Paragraph Styles Instructions: In this section, please show all calculations. Partial credit will be given wherever possible, when your calculations are shown and they are completed correctly. 32.-36. Premium Foods 2019 income statement is shown on the attachment. "Notes Payable" of $2,500 (amount in thousands) appears on Premium Foods' 2019 balance sheet. Premium Foods' management has made the following projections and assumptions for 2020: 1) 2020 sales are projected to increase by 10% over their 2019 level 2) In 2020, the company plans to pay out 50 percent of its "Net Income" as dividends, the other 50 percent of "Net Income will be additions to "Retained Earnings," as in 2019 3) An interest rate of 5 percent applies in 2020 to the debt balance ("Notes Payable" at the beginning of the year). 4) An income tax rate of 22% applies in 2020, as in 2019. Construct the projected 2020 income statement using the "Forecasted Financial Statements" (FFS) method. Assume the firm operated at full capacity in 2019. Please enter the numerical values for the 2020 projected income statement, along with your assumptions, on the Excel template available at the "Content" link at our course Web site under the "Exam One heading. 37-38. A stock expects to pay a year-end dividend of $2.50 a share (i.e., D = $2.50), assume that last year's dividend has already been paid). The dividend is expected to decline 5 percent a year, forever (i.e. g=-5%). The company's expected and required rate of retum is 12 percent. What is the current market price per share of this stock? 39.-40. The expected rate of return on the common stock of Northwest Corporation is 10 percent. The stock's dividend is expected to grow at a constant rate of 6 percent a year. The stock currently sells for $55 a share. What is the next expected dividend per share (L.e., Di) on this stock? Forms C. CALCULATION SECTION: I Instructions: In this section, please show all calculations. Partial credit will be given wherever possible, when your calculations are shown and they are completed correctly. 32.-36. Premium Foods' 2019 income statement is shown on the attachment. Notes Payable" of $2,500 (amount in thousands) appears on Premium Foods' 2019 balance sheet. Premium Foods' management has made the following projections and assumptions for 2020: 1) 2020 sales are projected to increase by 10% over their 2019 level. 2) In 2020, the company plans to pay out 50 percent of its "Net Income" as dividends; the other 50 percent of "Net Income" will be additions to Retained Earnings," as in 2019. 3) An interest rate of 5 percent applies in 2020 to the debt balance (Notes Payable" at the beginning of the year) 4) An income tax rate of 22% applies in 2020, as in 2019. Construct the projected 2020 income statement using the "Forecasted Financial Statements" (FFS) method. Assume the firm operated at full capacity in 2019. Please enter the numerical values for the 2020 projected income statement, along with your assumptions, on the Excel template available at the "Content" link at our course Web site under the "Exam One" heading
