The following information pertains to Benedict Company. Assume that all balance sheet amounts represent average balance figures. $$\begin{array} { l r }
\text { Total assets } & \$ 300,000 \
\text { Stockholders' equity-common } & 150,000 \
\text { Total stockholders' equity } & 200,000 \
\text { Sales revenue } & 100,000 \
\text { Net income } & 25,000 \
\text { Number of shares of common stock } & 6,000 \
\text { Common dividends } & 5,000 \
\text { Preferred dividends } & 7,000
\end{array}$$ What is the payout ratio for Benedict?
A)48%
B)20%
C)28%
D)5%

Question

The following information pertains to Benedict Company. Assume that all balance sheet amounts represent average balance figures. $$\begin{array} { l r } 
\text { Total assets } & \$ 300,000 \
\text { Stockholders' equity-common } & 150,000 \
\text { Total stockholders' equity } & 200,000 \
\text { Sales revenue } & 100,000 \
\text { Net income } & 25,000 \
\text { Number of shares of common stock } & 6,000 \
\text { Common dividends } & 5,000 \
\text { Preferred dividends } & 7,000
\end{array}$$ What is the payout ratio for Benedict?
A)48%
B)20%
C)28%
D)5%

Quizplus · Accepted Answer

The payout ratio is calculated as (Common Dividends / Net Income) * 100. Here, it is ($5,000 / $25,000) * 100 = 20%.

The Following Information Pertains to Benedict Company What Is the Payout Ratio for Benedict? A)48% B)20% C)28

The Following Information Pertains to Benedict Company What Is the Payout Ratio for Benedict?
A)48%
B)20%
C)28