The following information pertains to Marsh Company. Assume that all balance sheet amounts represent average balance figures. $$\begin{array} { l r }
\text { Total asset } & \$ 400,000 \
\text { Stockholders' equity-common } & 200,000 \
\text { Total stockholders' equity } & 280,000 \
\text { Sales revenue } & 120,000 \
\text { Net income } & 25,000 \
\text { Number of shares of common stock } & 8,000 \
\text { Common dividends } & 9,000 \
\text { Preferred dividends } & 6,000
\end{array}$$ What is Marsh's payout ratio?
A) 60%.
B) 36%.
C) 24%.
D) 7.5%.

Question

The following information pertains to Marsh Company. Assume that all balance sheet amounts represent average balance figures. $$\begin{array} { l r } 
\text { Total asset } & \$ 400,000 \
\text { Stockholders' equity-common } & 200,000 \
\text { Total stockholders' equity } & 280,000 \
\text { Sales revenue } & 120,000 \
\text { Net income } & 25,000 \
\text { Number of shares of common stock } & 8,000 \
\text { Common dividends } & 9,000 \
\text { Preferred dividends } & 6,000
\end{array}$$ What is Marsh's payout ratio?
A) 60%.
B) 36%.
C) 24%.
D) 7.5%.

Quizplus · Accepted Answer

The payout ratio is calculated as (Common Dividends / Net Income) * 100. Here, it is ($9,000 / $25,000) * 100 = 36%.

The Following Information Pertains to Marsh Company What Is Marsh's Payout Ratio? A) 60

The Following Information Pertains to Marsh Company What Is Marsh's Payout Ratio?
A) 60