From the Information Below, Compute the Payout Ratio for Kevin's

question 134

Multiple Choice

From the information below, compute the payout ratio for Kevin's Trailers. $$\begin{array} { l r } \text { Net Income } & \$ 250 \\\text { Cash Dividends (common) } & 40 \\\text { Retained Earnings } & 500 \\\text { Stock Dividends (common) } & 10\end{array}$$

• A)20%.
• B)16%.
• C)8%.
• D)4%.

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Definitions:

Equity Multiplier

A financial ratio that indicates the portion of a company's assets that is financed by stockholder's equity, highlighting leverage.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, providing insights into its financial position.

Income Statement

A financial statement that reports a company's revenues, expenses, and profits or losses over a specific time period.

Equity Multiplier

A financial leverage ratio that measures a company's total assets financed by stockholders' equity.