Bertram Corporation had net income of $325000 and paid dividends to common stockholders of $39000 in 2021.The weighted average number of shares outstanding in 2021 was 50000 shares.Bertram Corporation's common stock is selling for $52 per share on the New York Stock Exchange.Bertram Corporation's payout ratio for 2021 is

Question

Quizplus · Accepted Answer

Payout ratio is calculated by dividing dividends paid to common stockholders by net income. 
Payout ratio = Dividends paid / Net Income 
= $39,000 / $325,000 
= 0.12 or 12% 
Therefore, the correct answer is Choice C.

Bertram Corporation Had Net Income of $325000 and Paid Dividends