Sperle Corporation has provided the following data concerning its stockholders\'

Question

Sperle Corporation has provided the following data concerning its stockholders' equity accounts:

  

Net income for Year 2 was $30,400. Dividends on common stock during Year 2 totaled $6,400. The market price of common stock at the end of Year 2 was $3.08 per share.

The company's dividend payout ratio for Year 2 is closest to:

14.7%

1.6%

2.6%

21.1%

Year 2 Year 1 Stockholders' equity:     Common stock, $5 par value    $400,000 $400,000     Additional paid-in capital-common stock         60,000 60,000     Retained earnings             654,000    630,000 Total stockholders' equity         $1,114,000 $1,090,000

Explanation / Answer

dividend payout ratio =Dividends/Net income

which is equal to

=(6400/30400)

21.1%(Approx)

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