The financial planning committee of Nickel News, Co. has projected a Growth Rate of 8% for...

The financial planning committee of Nickel News, Co. has projected a Growth Rate of 8% for both Sales and Operating Costs for the upcoming year. No external capital will be required, and currently prevailing Interest Rates and Tax Rates are not expected to change.

Nickel News Company

Income Statement

For the (Current)Year Ended ________________

Sales …..................................................... $ 240,000,000

Operating Costs ….................................... 113,000,000

Operating Income …................................ $ 127,000,000

Interest Expense ….................................. 27,000,000

Pre-Tax Income …................................... $ 100,000,000

Income Taxes …....................................... 33,000,000

Net Income …........................................... $ 67,000,000

Preferred Stock Dividends for the current year totaled $ 10,000,000. Common Stock Dividends for the current year totaled $ 16,000,000. If management is expected to give Common Stockholders an 8% increase in Dividends Per Share, calculate the rate at which Retained Earnings will grow for the upcoming year.

Solutions

Expert Solution

jeff jeffy answered 11 months ago

Next > < Previous

Related Solutions

Please calculate the projected financial information for 2019E & 2020E. The growth rate is 21%. Revenue...

Please calculate the projected financial information for 2019E & 2020E. The growth rate is 21%. Revenue 2017A 2018A 2019E 2020E Total Revenue $7,766,000 $7,782,000 Cost of Revenue $4,299,000 $4,445,000 Gross Profit $3,467,000 $3,337,000 Operating Expenses Selling General and Administrative $2,303,000 $2,382,000 Total Operating Expenses $6,760,000 $7,000,000 Operating Income or Loss $1,006,000 $782,000 Incoming from Continuing Operations Total Other Income/Expenses Net ($2,000) ($204,000) Earnings Before Interest and Taxes $1,006,000 $782,000 Interest Expense ($11,000) ($12,000) income Before Tax $1,004,000 $578,000 Income Tax...

What is the role of financial planning? 2/ Explain the determinants of sustainable growth rate (SGR).

McCormac Co. wishes to maintain a growth rate of 8 percent a year, a debt-equity ratio...

McCormac Co. wishes to maintain a growth rate of 8 percent a year, a debt-equity ratio of 0.41, and a dividend payout ratio of 64 percent. The ratio of total assets to sales is constant at 1.29. Required: What profit margin must the firm achieve?

Planning a festival. The Earth Day Committee has begun planning for an Earth Day festival. We...

Planning a festival. The Earth Day Committee has begun planning for an Earth Day festival. We list the subtasks for this project and the dependencies among them in the following table. Draw a PERT diagram for this project and construct a schedule for the tasks. Task Preceding Tasks Time Required (weeks) Get funding None 2 Get permits None 1 Decide on program 1 2 Rent tents 1,2,3 2 Arrange for speakers, entertainers, etc. 1,2,3,4 4 Advertise 1,3,5 2 Set up...

1. The Federal Open Market Committee is planning to raise the Federal Funds rate at least...

1. The Federal Open Market Committee is planning to raise the Federal Funds rate at least twice this year. In light of current events is this a good idea?

What is meant by Financial Planning & Growth? also define short & long term planning?

i.) Tan Co. has given out dividend payment of $23,000 and it dividend growth rate is...

i.) Tan Co. has given out dividend payment of $23,000 and it dividend growth rate is expected to increase by 8 percent per year. The current share price is $30 and there are currently 30,000 share outstanding. What is the current cost of equity of share now. ii.) Borneo CO. has bonds that has 10 more years to mature. Its current yield is at 8 percent and its price currently is at $90. Given its tax rate of 40 percent,...

TB Problem Qu. 8-217 Tilson Corporation has projected sales and ... Tilson Corporation has projected sales...

TB Problem Qu. 8-217 Tilson Corporation has projected sales and ... Tilson Corporation has projected sales and production in units for the second quarter of the coming year as follows: April May June Sales 49,000 39,000 59,000 Production 59,000 49,000 49,000 Cash-related production costs are budgeted at $6 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to...

8% inflation rate and a 6% growth rate. What kind of economy is that if we...

8% inflation rate and a 6% growth rate. What kind of economy is that if we are talking about a large, developed economy like the US (overheating or recessionary)? What should the Fed do? What is their concern in this type of economy (unemployment or inflation)? How would the Fed use its tools to try to correct this problem? Can you tell us which specific ways the Fed would engage in contractionary monetary policy? Would they buy or sell Treasuries...

Projected growth rate 20% Tax rate 21% Operating capacity 93% Sales $198,000,000 Cost of goods sold...

Projected growth rate 20% Tax rate 21% Operating capacity 93% Sales $198,000,000 Cost of goods sold 128,600,000 Other expenses 31,500,000 Depreciation 10,500,000 EBIT $27,400,000 Interest 4,350,000 EBT $23,050,000 Taxes (21%) 4,840,500 Net income $18,209,500 Dividends $9,500,000 Additions to retained earnings 8,709,500 Assets Liabilities & Equity Current assets Current liabilities Cash $1,358,000 Accounts payable $2,400,000 Accounts receivable 4,180,000 Notes payable 5,830,000 Inventory 8,753,000 Total $8,230,000 Total $14,291,000 Long-term debt $67,500,000 Owners' equity Fixed assets Common stock and paid-in surplus $8,000,000 Net...

Subjects