Rosa's is a small chain of Mexican food restaurants that features five delicious varieties of salsa. The business has grown over the past ten years from a hobby to a small corporation with 200,000 shares of common stock outstanding. The corporation has not issued any preferred stock. The following is Rosa's latest financial data:

-What is the dividend payout ratio for Rosa's?

Question

Rosa's is a small chain of Mexican food restaurants that features five delicious varieties of salsa. The business has grown over the past ten years from a hobby to a small corporation with 200,000 shares of common stock outstanding. The corporation has not issued any preferred stock. The following is Rosa's latest financial data:
 
-What is the dividend payout ratio for Rosa's?

Quizplus · Accepted Answer

The dividend payout ratio is calculated by dividing the dividends per share by earnings per share. From the financial data given, the dividends per share are $0.50 and the earnings per share are $3.85. Dividing $0.50 by $3.85 gives a dividend payout ratio of 0.13, or 13%. Therefore, the best choice is B, with a dividend payout ratio of 0.13.

Rosa's Is a Small Chain of Mexican Food Restaurants That