income statement sales $ 12, 500, 000 cost of good sold 6,550,000 gross profit 5
ID: 2800670 • Letter: I
Question
income statement
sales $ 12, 500, 000
cost of good sold 6,550,000
gross profit 5, 950, 000
operating expenses $ 2,400,000
interest expenses 450,000
taxes 750, 000
net income $ 2, 350, 000
number of outstanding shares 1,000,000
current market price $ 37.90
balance sheet
cash $ 550,000
account receivable 1,450,000
inventory 1,040,000
total current assets $ 3,040,000
total fixed assets 10, 000, 000
total current liabilities 2,500,000
long term liabilities 6,000,000
paid in capital 2,000,000
retained earnings 2,540,000
1. calculate the dividends per share if the current dividend payout ratio is 30 %
a. $.705 per share
b. $.735 per share
c.$.854 per share
d. $.623 per share
Explanation / Answer
1. Calculate the dividends per share if the current dividend payout ratio is 30 %
Dividends per share = (Net Income/ Number of outstanding shares)*0.3
= (2,350,000/1,000,000)0.3 = $0.705
Therefore the correct answer is option a.
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