Dividend payout ratio
Not what you're looking for?
Question 37: (2 points)
Financial statements for Lardy Company appear below:
Lardy Company
Balance Sheet
December 31, Year 2 and Year 1
(dollars in thousands)
Year 2 Year 1
Current assets:
Cash and marketable securities $ 168 $ 170
Accounts receivable, net 222 170
Inventory 172 164
Prepaid expenses 28 28
Total current assets 590 532
Noncurrent assets:
Plant & equipment, net 1,930 1,830
Total assets $2,520 $2,362
Current liabilities:
Accounts payable $ 114 $ 130
Accrued liabilities 76 58
Notes payable, short term 110 140
Total current liabilities 300 328
Noncurrent liabilities:
Bonds payable 324 388
Total liabilities 624 716
Stockholders' equity:
Preferred stock, $20 par, 10% 200 200
Common stock, $10 par 200 200
Additional paid-in capital-common stock 190 190
Retained earnings 1,306 1,056
Total stockholders' equity 1,896 1,646
Total liabilities & stockholders' equity $2,520 $2,362
Lardy Company
Income Statement
For the Year Ended December 31, Year 2
(dollars in thousands)
Sales (all on account) $2,220
Cost of goods sold 1,400
Gross margin 820
Selling and administrative expense 110
Net operating income 710
Interest expense 20
Net income before taxes 690
Income taxes (30%) 207
Net income $483
Dividends during Year 2 totaled $166,000 of which $20,000 were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $100.
Lardy Company's dividend payout ratio for Year 2 was closest to:
33.3%
30%
31.5%
33.8%
Purchase this Solution
Solution Summary
The solution explains how to calculate the dividend payout ratio
Purchase this Solution
Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.