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    Pro forma income statements

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    Please help with the following problem - provide the solution in Excel.

    Company x recently reported the following 2008 income statement in millions of dollars:

    sales 700
    operating costs including depreciation 500
    ebit 200
    interest 40
    ebt 160
    taxes (40%) 64
    net income 96
    dividends 32
    addition to retained earnings 64

    This year the company is forecasting a 25% increase in sales; and it expects that its year-end operating costs, including depreciation, will equal 70% of sales. the company's tax rate, interest expense, and dividend payout ratio are all expected to remain constant.

    a. what is the company's projected 2009 net income?
    b. what is the expected growth rate in the company's dividends?

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    https://brainmass.com/business/finance/pro-forma-income-statements-277724

    Solution Preview

    company x recently reported the following 2008 income statement in millions of dollars:

    sales 700
    operating costs including depreciation 500
    ebit 200
    interest ...

    Solution Summary

    This response provides steps to compute the pro forma income statements. The solution is given in an Excel file.

    $2.19

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