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

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

Sales $16,900
Operating costs including depreciation 13,520
EBIT $3,380
Interest 330
EBT $3,050
Taxes (40%) 1,220
Net income $1,830

Prior to reporting this income statement, the company wants to determine its annual dividend. The company has 340,000 shares of common stock outstanding, and its stock trades at $57 per share.

  1. The company had a 45% dividend payout ratio in 2015. If Brooks wants to maintain this payout ratio in 2016, what will be its per-share dividend in 2016? Round your answer to the nearest cent.
    $  

  3. If the company maintains this 45% payout ratio, what will be the current dividend yield on the company's stock? Round your answer to two decimal places.
    %

  5. 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 your answer to the nearest cent.
    $  

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

a.)

Dividend per share = $2.42

b.)

Current Dividend Yield = 4.25%

c.)

Dividend per share = $2.18

Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.

jeff jeffy answered 1 year ago
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