BVI Corporation had net income of $1,600,000 and paid dividends to common stockholders of $320,000 in 2017. The weighted average number of shares outstanding in 2017 was 500,000 shares. BVI Corporation's common stock is selling for $50 per share on the NASDAQ. BVI Corporation's payout ratio for 2017 is
A) $5 per share.
B) 20%.
C) 32%.
D) 5%.

Question

Quizplus · Accepted Answer

The payout ratio is calculated as dividends paid divided by net income. Here, it is $320,000 / $1,600,000 = 20%.

BVI Corporation Had Net Income of $1,600,000 and Paid Dividends