15-7 DIVIDENDS Brooks Sporting Inc. is prepared to report the following 2018 income state-ment (shown in thousands of dollars).Sales$15,300Operating costs including depreciation12,240EBIT$ 3,060Interest330EBT$ 2,7301,092Taxes (40%)Net income$ 1,638Prior to reporting this income statement, the company wants to determine its annual divi-dend. The company has 320,000 shares of common stock outstanding, and its stock tradesat $37 per share.a. The company had a 25% dividend payout ratio in 2017. If Brooks wants to maintainthis payout ratio in 2018, what will be its per-share dividend in 2018?b. If the company maintains this 25% payout ratio, what will be the current dividendyield on the company's stock?c. The company reported net income of $1.35 million in 2017. Assume that the numberof shares outstanding has remained constant. What was the company's per-share divi-dend in 2017?d. As an alternative to maintaining the same dividend payout ratio, Brooks is consider-ing maintaining the same per-share dividend in 2018 that it paid in 2017. If it choosesthis policy, what will be the company's dividend payout ratio in 2018?e. Assume that the company is interested in dramatically expanding its operations andthat this expansion will require significant amounts of capital. The company wouldlike to avoid transactions costs involved in issuing new equity. Given this scenario,would it make more sense for the company to maintain a constant dividend payoutratio or to maintain the same per-share dividend? Explain.

Name: 15-7 DIVIDENDS Brooks Sporting Inc. is prepared to report the followi
Uploaded: 2022-11-22T13:58:24.000Z
Channel: Bartleby
Description: 15-7 DIVIDENDS Brooks Sporting Inc. is prepared to report the following 2018 income state-ment (shown in thousands of dollars).Sales$15,300Operating costs including depreciation12,240EBIT$ 3,060Interest330EBT$ 2,7301,092Taxes (40%)Net income$ 1,638P