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.

Expert Solution

jeff jeffy answered 1 year ago

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