Suppose a firm has a retention ratio of 15 percent, net income of $60 million, and 15 million shares outstanding. What would be the dividend per share paid out on the firm's stock?

Name: Suppose a firm has a retention ratio of 15 percent, net income of $60 million, and 15 million shares outstanding. What would be the dividend per share paid out on the firm's stock?
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Question

Quizplus · Accepted Answer

Dividend per share = Net income * Retention ratio / Number of shares outstanding= $60 million * 15% / 15 million shares= $0.60 per share

Suppose a Firm Has a Retention Ratio of 15 Percent