A firm has EBIT of $926,400.00. Assume that the firm will pay $253,250.00 in interest in the upcoming year. The firm has a corporate tax rate of 35.00%. The firm has 129,000.00 common shares outstanding.
a) What is the net income for the firm?
b) If the firm pays a 20% dividend, what are the dividends per share?
c) If the firm pays a 20% dividend, how much is added to retained earnings?