Ferman Corporation had net income of $140000 and paid dividends of $40000 to common stockholders and $20000 to preferred stockholders in 2021.Ferman Corporation's common stockholders' equity at the beginning and end of 2021 was $870000 and $1130000 respectively.Ferman Corporation's payout ratio for 2021 was

Question

Quizplus · Accepted Answer

The payout ratio is calculated as the total dividends paid to common stockholders divided by the net income. Here, the payout ratio is ($40,000 / $140,000) * 100 = 28.6%.

Ferman Corporation Had Net Income of $140000 and Paid Dividends