Tito Corporation had net income of $2,000,000 and paid dividends to common stockholders of $300,000 in 2022.The weighted average number of shares outstanding in 2022 was 400,000 shares.Tito Corporation's common stock is selling for $50 per share on the NASDAQ.Tito Corporation's payout ratio for 2022 is

Question

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The payout ratio is calculated as dividends paid divided by net income. Here, it is $300,000 / $2,000,000 = 0.15 or 15%.

Tito Corporation Had Net Income of $2,000,000 and Paid Dividends