Nova earned $7.20 per share and maintains a stable payout ratio of 60%. Nova has 1,000,000 shares outstanding and a capital budget of $5 million. If Nova maintains a debt ratio of 0.50, what were the dividends per share?
A) $4.32
B) $2.88
C) $2.20
D) Cannot be determined from the information provided

Question

Quizplus · Accepted Answer

Nova's earnings per share are $7.20, and with a payout ratio of 60%, the dividends per share would be 60% of $7.20, which is $4.32.

Nova Earned $7