## Dividend Payout Ratio### Data| | Previous Year | Current Year ||---------------------------|---------------|--------------|| Net Income | $45,500 | $62,400 || Average stockholders' equity | 1,300,000 | 1,950,000 || Dividend per common share | 2.47 | 2.60 || Earnings per share | 2.85 | 3.20 || Market price per common share, year-end | 24.70 | 27.30 |### InstructionsCalculate the dividend payout for Evans & Sons for each year. Did the dividend payout increase?#### Dividend Payout Calculation Table| | Numerator | Denominator | Dividend Payout Ratio ||---------------|-----------|-------------|-----------------------|| Previous Year | | | || Current Year | | | |### ConclusionThe dividend payout **decreased** ✅ from the previous year to the current year.

Dividend payout ratio is calculated by dividing dividend per share by earnings per share. Dividends per share are calculated by dividing dividends by number of shares outstanding. Earnings per share is calculated by dividing earnings available to common stockholders' by number of shares outstanding. Dividend payout ratio of previous year= Dividend per common share ÷ Earnings per share= ($2.47 ÷ $2.85)×100= 86.67%Dividend payout ratio of current year= Dividend per common share ÷ Earnings per share= ($2.60 ÷ $3.20)×100= 81.25%Requirement #:—NumeratorDenominatorDividend Payout RatioDividend per shareEarnings per sharePrevious year$2.47$2.8586.67%Current year $2.60$3.2081.25%The dividend payout decreased from previous year to the current year.

Business

Accounting

Dividend Payout Ratio Net Income Average stockholders' equity Dividend per common share Earnings per share Market price per common share, year-end Previous Year Current Year Previous Year Current Year $45,500 $62,400 1,300,000 1,950,000 The dividend payout decreased 2.47 2.85 24.70 Calculate the dividend payout for Evans & Sons for each year. Did the dividend payout increase? Numerator Denominator 2.60 3.20 27.30 X x from previous year to the current year. ◆ X X X Dividend Payout Ratio % %

Dividend Payout Ratio Net Income Average stockholders' equity Dividend per common share Earnings per share Market price per common share, year-end Previous Year Current Year Previous Year Current Year $45,500 $62,400 1,300,000 1,950,000 The dividend payout decreased 2.47 2.85 24.70 Calculate the dividend payout for Evans & Sons for each year. Did the dividend payout increase? Numerator Denominator 2.60 3.20 27.30 X x from previous year to the current year. ◆ X X X Dividend Payout Ratio % %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Dividend Yield On June 30, Rae Corporation had a market price of $16 per share of common stock. For the previous year, Rae paid an annual dividend of $0.96. Compute the dividend yield for Rae Corporation. If necessary, round your answer to two decimal places.
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