Blue Company has 12,000,000 in sales. COGS are 40% of sales. Operating costs are $1,200,000 plus depreciation expense of $80,000 and interest expense $80,000. Tax rate is 40%. They have 1,000,000 shares of stock outstanding. a. What is their net income? b. If they retained 80% and paid 20% in dividends, what is their dividend payout?

Blue Company has 12,000,000 in sales. COGS are 40% of sales. Operating costs are $1,200,000 plus depreciation expense of $80,000 and interest expense $80,000. Tax rate is 40%. They have 1,000,000 shares of stock outstanding. a. What is their net income? b. If they retained 80% and paid 20% in dividends, what is their dividend payout?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 10P: The Moore Corporation has operating income (EBIT) of 750,000. The companys depreciation expense is...

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