QUESTION 27 Smith Motors Inc. manufactures, distributes, and services automotive parts and engines worldwide. Smith's income statement for the year just ending is shown below. Assume that today is the first day of Year 2 and that Smith's common shares are trading at a price of $88. In its most recent Management Discussion and Analysis (MD&A) Smith's management forecast earnings-per-share of $5 for Year 2. Smith Motors Inc. Income Statement Year 1 ($000,000s) Revenue COGS SG&A Dep. Exp. EBIT Int. Exp. Pre-Tax Income Income Tax Net Income $20,995 15,624 2,466 247 2,658 55 2,603 898 1,705 Shares Outstanding (millions) 205 | Total Common Dividends $300.5 What is the dividend per share at Year 1? O 1.75 1.47 1.12 O 0.68 8.32 QUESTION 28 Refer to the information provided in Question 27 (Smith Motors Inc). If Smith maintains its Year 1 dividend per share in Year 2, then what will its Year 2 payout ratio be? 29.3% 25.3% 26.3% 27.3% 28.3%