A firm has a policy of paying out 50% of its net income over $100,000 in dividends. If the firm's netincome is $400,000, the total dividend payout would be
A) $400,000
B) $100,000
C) $150,000
D) $200,000

Question

Quizplus · Accepted Answer

Net income over $100,000 = $400,000 - $100,000 = $300,000
50% of net income over $100,000 = 0.5 x $300,000 = $150,000
Therefore, total dividend payout would be $150,000.

A Firm Has a Policy of Paying Out 50% of Its