Remaining Time: 35 minutes, 50 seconds. y Question Completion Status QUESTION 49

Question

Remaining Time: 35 minutes, 50 seconds. y Question Completion Status QUESTION 49 Partridge Inc. provides the following information for the year 2014: Net income Market price per share of common stock Dividends paid Common stock outstanding at Jan 1, 2014 Common stock outstanding at Dec 31, 2014 180,000 $20.00/share $1.00/share 110,000 shares 150,000 shares The company has no preferred stock outstanding. Calculate the dividend payout ratio. 67.02% 33.33% 30.00% 72.46% Save All Click Save and Submit to save and submit. Click Save All Answers to save all answers.

Explanation / Answer

D. 72.46%

Earnings per share = Net income / Average number of common shares outstanding = $180,000 / [(110,000 + 150,000) / 2] = $1.38

Dividend payout ratio = Annual dividend per share / Earnings per share = $1.00 / $1.38 = 72.46%

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