Blitzen Corporation had net income of $500,000 and paid dividends to common stockholders of $40,000 in 2014. The weighted average number of shares outstanding in 2014 was 60,000 shares. Blitzen Corporation's common stock is selling for $50 per share on the New York Stock Exchange. Blitzen Corporation's payout ratio for 2014 is
A)$8.33 per share.
B)8%.
C)12%.
D)16%.

Question

Quizplus · Accepted Answer

The payout ratio is calculated by dividing the dividends paid to common stockholders by the net income. In this case, the payout ratio is $40,000/$500,000 = 8%.

Blitzen Corporation Had Net Income of $500,000 and Paid Dividends