Question: 1. Consider the following simplified financial statements for the Equity Inc.:
Balance Sheet:
Assets $9,500 Debt $4,500
Equity $5,000
Total $9,500 Total $9,500
Income Statement:
Sales $20,000
Costs $14,400
Net Income $5,600
Equity Inc. is expecting a sales increase of 8 percent and it anticipates that every item on the balance sheet will increase by 8 percent as well. What is the dividend they predict to pay out? Assume no income taxes.