Suppose a firm pays total dividends of $1,500,000 out of net income of $6.0 million. What...
Suppose a firm pays total dividends of $1,500,000 out of net income of $6.0 million. What would the firm’s payout ratio be? (Round your answer to 2 decimal places.)
Homework Answers
CALCULATION OF FIRM DIVIDEND PAYOUT RATIO :
NET INCOME = $ 6.0 MILLIONS
= $ 6 * 1000000
= $ 6000000
TOTAL DIVIDEND = $ 1500000
DPR ( DIVIDEND PAYOUT RATIO ) =( TOTAL DIVIDEND / NET INCOME) *100
=( $ 1500000 / $ 6000000) * 100
= 0.25*100
DPR =25%
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