A Waterloo Firm with Net Income of $500,000 Pays 48

question 260

Multiple Choice

A Waterloo firm with net income of $500,000 pays 48% of net income out in dividends. If the firm has 150,000 shares of common stock outstanding, what is the dividend paid per share of stock?

• A) $0.30
• B) $1.44
• C) $1.60
• D) $1.73
• E) $3.33

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Definitions:

Prepaid Rent

An advance payment for rent that is recorded as an asset on the balance sheet until it is incurred as an expense.

Interest Expense

The cost incurred by an entity for borrowed funds, such as loans or bonds, over a specific period.

Prepaid Expenses

Expenditures paid in advance for goods or services to be received in the future.

Economic Value

The worth of a good or service as determined by the market or the utility it provides to individuals or firms.