**Dividend Payout Ratio Analysis**### Financial Data Overview| | 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 |### InstructionCalculate the dividend payout for Evans & Sons for each year. Consider whether the dividend payout increased.#### Dividend Payout Ratio Calculation Table| | **Numerator** | **Denominator** | **Dividend Payout Ratio** ||-------------------------|---------------|-----------------|---------------------------|| **Previous Year** | 0 | 0 | 0% || **Current Year** | 0 | 0 | 0% |\[\text{The dividend payout } \rightarrow \text{ from the previous year to the current year.}\]Use this data to determine the change in the dividend payout ratio from the previous year to the current year. - **Dividend Payout Ratio Formula**: \[ \text{Dividend Payout Ratio} = \left(\frac{\text{Dividend per Share}}{\text{Earnings per Share}}\right) \times 100 \] By using this formula, students and educators can calculate the dividend payout ratio and explore the financial health and distribution policy of the company over the given period.

The dividend payout ratio tells about the ratio of dividends paid from the total income of the…

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 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 0 0 ► from previous year to the current year ◆ 0 0 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 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 0 0 ► from previous year to the current year ◆ 0 0 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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