Sealy Corporation had the following information in its financial statements for the years ended 2014 and 2015: What is the payout ratio for Sealy Corporation for the year ended 2015?

Question

Sealy Corporation had the following information in its financial statements for the years ended 2014 and 2015:  What is the payout ratio for Sealy Corporation for the year ended 2015?

Quizplus · Accepted Answer

The payout ratio is calculated by dividing dividends per share by earnings per share. From the financial statements, we can see that Sealy Corporation paid out dividends of $0.50 per share in 2015 and had earnings per share of $7.65. Therefore, the payout ratio for 2015 is:
Payout ratio = Dividends per share / Earnings per share
Payout ratio = $0.50 / $7.65
Payout ratio = 0.065 or 6.5%
The correct answer is C, 6.5%.

Sealy Corporation Had the Following Information in Its Financial Statements