Question

Asked Dec 18, 2019

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Suppose a firm pays total dividends of $420,000 out of net income of $3.7 million. What would the firm's payout ratio be?

Step 1

Dividend payout ratio refers to the fraction of net income that a company pays to its shareholders in the form of dividends.

Step 2

Dividend payout ratio is calculated as total dividends divided by net income.

Step 3

Given that total dividends is equal to $420,000 and net income is equ...

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