Blitzen Corporation had net income of $500000 and paid dividends to common stockholders of $40000 in 2017. The weighted average number of shares outstanding in 2017 was 60000 shares. Blitzen Corporation's common stock is selling for $50 per share on the New York Stock Exchange. Blitzen Corporation's payout ratio for 2017 is

Question

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The payout ratio is calculated as the dividends paid to common stockholders divided by the net income. For Blitzen Corporation, this is $40,000 / $500,000 = 0.08 or 8%.

Blitzen Corporation Had Net Income of $500000 and Paid Dividends