Dooley Corporation had net income of $200,000 and paid dividends to ordinary shareholders of $40,000 in 2011.The weighted average number of shares outstanding in 2011 was 50,000 shares.Dooley Corporation's ordinary shares are selling for $50 per share on the New York Stock Exchange.Dooley Corporation's payout ratio for 2011 is

Question

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The payout ratio is calculated by dividing the dividends paid to ordinary shareholders by the net income. In this case, the payout ratio is $40,000/$200,000 = 20%.

Dooley Corporation Had Net Income of $200,000 and Paid Dividends