Bertram Corporation had net income of $325,000 and paid dividends to common stockholders of $39,000 in 2017. The weighted average number of shares outstanding in 2017 was 50,000 shares. Bertram Corporation's common stock is selling for $52 per share on the New York Stock Exchange. Bertram Corporation's payout ratio for 2017 is
A) $6.5 per share.
B) 16%.
C) 12%.
D) 8.3%.

Question

Quizplus · Accepted Answer

Payout ratio = Dividends / Net Income
Payout ratio = $39,000 / $325,000 = 0.12 = 12%
Therefore, the correct answer is C) 12%.

Bertram Corporation Had Net Income of $325,000 and Paid Dividends