Calculate payout ratio given the following information: EBIT $100,000; tax rate 30%; dividends paid $24,500.

Name: Calculate payout ratio given the following information: EBIT $100,000; tax rate 30%; dividends paid $24,500.
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Question

Quizplus · Accepted Answer

The payout ratio is calculated as Dividends Paid / Net Income. First, calculate Net Income = EBIT - Taxes = $100,000 - ($100,000 * 30%) = $100,000 - $30,000 = $70,000. Then, Payout Ratio = $24,500 / $70,000 = 0.35 or 35%.

Calculate Payout Ratio Given the Following Information: EBIT $100,000; Tax