(Computing interest tax savings) See Study Problem 15-1. You have now discovered that Spriggs Plc has suffered due to new competition and its profitability has been significantly reduced to the extent that the numbers for the last quarter end are likely to report an operating loss before interest and tax. However, management has assured you that this is a short-term problem. Revenue for 2018 was £60 million (it was £64 million in 2017) and costs in 2018 seem to have increased by £4 million from £56 million in 2017. Interest on historical long-term debt is payable at 10 percent. The dividend policy reflects a steady increase of 3 percent every year for the last decade. The total dividend payable for 2017 was £2.4 million. The next tranche of long-term debt repayment is due in five months’ time when it needs to repay £8 million of principal. What do you think are the problems faced by managers of Spriggs Plc? Suggest some ways to maintain shareholders’ confidence.