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A company has forecasted net income to be $320,000. Net income was $250,000 in the prior...

A company has forecasted net income to be $320,000. Net income was $250,000 in the prior year, when they also paid dividends of $100,000. What are forecasted dividends if the company wants to keep the payout ratio constant?

a) $192,000

b) $128,000

c) $78,125

d) $100,000

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Answer #1

Payout ratio = 40.00% [ 100000/250000] Forecasted dividends = $ 128,000! [ 320000 x 40% ]

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