Brooks Sporting Inc. is prepared to report the following 2016 income statement (shown in thousands of...

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Finance

Brooks Sporting Inc. is prepared to report the following 2016income statement (shown in thousands of dollars).

Sales$16,900
Operating costs including depreciation13,520
EBIT$3,380
Interest330
EBT$3,050
Taxes (40%)1,220
Net income$1,830

Prior to reporting this income statement, the company wants todetermine its annual dividend. The company has 340,000 shares ofcommon stock outstanding, and its stock trades at $57 pershare.

  1. The company had a 45% dividend payout ratio in 2015. If Brookswants to maintain this payout ratio in 2016, what will be itsper-share dividend in 2016? Round your answer to the nearestcent.
    $  

  2. If the company maintains this 45% payout ratio, what will bethe current dividend yield on the company's stock? Round youranswer to two decimal places.
    %

  3. The company reported net income of $1.65 million in 2015.Assume that the number of shares outstanding has remained constant.What was the company's per-share dividend in 2015? Round youranswer to the nearest cent.
    $  

Answer & Explanation Solved by verified expert
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Please refer to below spreadsheet for calculation and    See Answer
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Transcribed Image Text

Brooks Sporting Inc. is prepared to report the following 2016income statement (shown in thousands of dollars).Sales$16,900Operating costs including depreciation13,520EBIT$3,380Interest330EBT$3,050Taxes (40%)1,220Net income$1,830Prior to reporting this income statement, the company wants todetermine its annual dividend. The company has 340,000 shares ofcommon stock outstanding, and its stock trades at $57 pershare.The company had a 45% dividend payout ratio in 2015. If Brookswants to maintain this payout ratio in 2016, what will be itsper-share dividend in 2016? Round your answer to the nearestcent.$  If the company maintains this 45% payout ratio, what will bethe current dividend yield on the company's stock? Round youranswer to two decimal places.%The company reported net income of $1.65 million in 2015.Assume that the number of shares outstanding has remained constant.What was the company's per-share dividend in 2015? Round youranswer to the nearest cent.$  

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