Problem: Please help with the following problem - provide the solution in Excel.
Company x 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. the company's tax rate, interest expense, and dividend payout ratio are all expected to remain constant.
a. what is the company's projected 2009 net income?
b. what is the expected growth rate in the company's dividends?