The following information relates to the operations of Branded Ltd. The net profit after tax was $1,000,000. The company distributed ordinary dividends of $600,000 to its shareholders. Over the year, weighted average number of ordinary shares were 2,000,000. Ordinary shares are currently selling for $8.00 per share. What is the dividend pay-out rate for the company?
The following information relates to the operations of Branded Ltd. The net profit after tax was $1,000,000. The company distributed ordinary dividends of $600,000 to its shareholders. Over the year, weighted average number of ordinary shares were 2,000,000. Ordinary shares are currently selling for $8.00 per share. What is the dividend pay-out rate for the company?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The following information relates to the operations of Branded Ltd. The net profit after tax was $1,000,000. The company distributed ordinary dividends of $600,000 to its shareholders. Over the year, weighted average number of ordinary shares were 2,000,000. Ordinary shares are currently selling for $8.00 per share. What is the dividend pay-out rate for the company?
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60% |
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47.5% |
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50% |
||
|
166.67% |
Expert Solution
Step 1
Dividend represents the distribution of profit earned by the company among its shareholders. The dividend payout ratio is calculated by dividing the dividend per share by the earnings per share.
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