BVI Corporation had net income of $1,600,000 and paid dividends to common stockholders of $400,000 in 2014. The weighted average number of shares outstanding in 2014 was 500,000 shares. BVI Corporation's common stock is selling for $50 per share on the NASDAQ. BVI Corporation's payout ratio for 2014 is

Question

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The payout ratio is calculated as dividends paid divided by net income. Here, it is $400,000 / $1,600,000 = 25%.

BVI Corporation Had Net Income of $1,600,000 and Paid Dividends