Selected data from the financial statements are presented below:

-Refer to Rapid Sign Corporation. What is the total payout ratio for 2020?
A)102%
B)88%
C)66%
D)30%

Question

Selected data from the financial statements are presented below:
 
-Refer to Rapid Sign Corporation. What is the total payout ratio for 2020?
A)102% 
B)88% 
C)66% 
D)30%

Quizplus · Accepted Answer

The total payout ratio is calculated by adding the dividends paid to shareholders to the net buybacks and then dividing by the net income. If the dividends paid were $30 million and the net buybacks were $40 million, with a net income of $68 million, the total payout ratio would be: ($30 million + $40 million) / $68 million = 102.94%, which rounds to 102%.

Selected Data from the Financial Statements Are Presented Below