Emerson Inc.'s would like to undertake a policy of paying out 45% of its income.Its latest net income was $1,250,000, and it had 225,000 shares outstanding.What dividend per share should it declare?
A) $2.14
B) $2.26
C) $2.38
D) $2.50
E) $2.63

Question

Quizplus · Accepted Answer

Step 1: Calculate the amount of income to be paid out as dividends.

45% of $1,250,000 = $562,500

Step 2: Calculate the dividend per share.

Dividend per share = Amount of income to be paid out / Number of shares outstanding

Dividend per share = $562,500 / 225,000 shares

Dividend per share = $2.50

Therefore, the dividend per share that Emerson Inc. should declare is $2.50.