Expected growth rate in austin dividends


Austin Grocers recently reported the following 2008 income statement (in millions of dollars): Sales $700 Operating costs including depreciation 500 EBIT $200 Interest 40 EBT $160 Taxes (40%) 64 Net income $ 96 Dividends $ 32 Addition to retained earnings $ 64 This year the company is forecasting a 25% increase in sales; and it expects that its year- end operating costs, including depreciation, will equal 70% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant. a. What is Austin's projected 2009 net income? b. What is the expected growth rate in Austin's dividends?

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Business Management: Expected growth rate in austin dividends
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