The following information was obtained from the records of Shae, Inc.:

Merchandise inventory	$	108,000
Notes payable (long-term)		120,000
Sales		360,000
Buildings and equipment		216,000
Selling, general, and administrative expenses		36,000
Accounts receivable		54,000
Common stock (20,000 shares)		160,000
Income tax expense		25,560
Cash		189,705
Retained earnings, 1/1/16		98,400
Accrued liabilities		7,200
Cost of goods sold		216,000
Accumulated depreciation		97,200
Interest expense		22,800
Accounts payable		36,000
Dividends declared and paid during 2016		10,735

Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2016, and that all income statement items reflect activities that occurred during the year ended December 31, 2016. There were no changes in paid-in capital during the year.

Required:

a. Prepare an income statement and statement of changes in stockholders equity for the year ended December 31, 2016, and a balance sheet at December 31, 2016, for Shae, Inc. Based on the financial statements that you have prepared for part a, answer the questions in parts be.

b. What is the company's average income tax rate?

c. What interest rate is charged on long-term debt?

d. What is the par value per share of common stock?

e. What is the company's dividend policy (i.e., what proportion of the company's earnings is used for dividends)?