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Montano1993 [528]
2 years ago
6

Here are data on two stocks, both of which have discount rates of 8%: Stock A Stock B Return on equity 8 % 5 % Earnings per shar

e $ 2.60 $ 1.80 Dividends per share $ 1.30 $ 1.30 What are the dividend payout ratios for each firm? (Enter your answers as a percent rounded to 2 decimal places.)
Business
1 answer:
Ierofanga [76]2 years ago
7 0

Answer:

The dividend payout ratios for each firm are 50%  and 72.22%

Explanation:

Dividend Payout Ratio Is the measure of the percantage of net income that is distributed to the shareholders in the form of dividends.  

Dividend Payout Ratio = Dividend paid/ Net Income

Stock A:

Dividend Payout Ratio = Dividend paid/ Net Income

                                      = 1.3/2.60  

                                       = 50%

Stock B:

Dividend Payout Ratio = Dividend paid/ Net Income

                                      = 1.3/1.8    

                                      = 72.22%

Therefore, The dividend payout ratios for each firm are 50%  and 72.22%

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Explanation:

The preparation of the end December Income statement for Cowboy Law Firm is presented below:

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Zielflug [23.3K]

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Correct option is B.

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3 0
2 years ago
During the year, Wright Company sells 415 remote-control airplanes for $100 each. The company has the following inventory purcha
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See explanation section.

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Cost of good sold under FIFO method,

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PEST and SWOT

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