Dooley Corporation Had Net Income of $200,000 and Paid Dividends

question 159

Multiple Choice

Dooley Corporation had net income of $200,000 and paid dividends to common stockholders of $40,000 in 2010. The weighted average number of shares outstanding in 2010 was 50,000 shares. Dooley Corporation's common stock is selling for $50 per share on the New York Stock Exchange. Dooley Corporation's payout ratio for 2010 is

• A) $4 per share.
• B) 20%.
• C) 25%.
• D) 10%.

---

Definitions:

Cash Collections

The process of gathering all cash receipts and payments, including from sales, financing, or investment activities.

Credit Customers

Customers who purchase goods or services on credit, with an agreement to pay at a later date.

Cash Disbursements

The outflow of cash for the purpose of payment, often documented for accounting purposes.

Direct Materials

Raw materials that are directly used in the manufacturing of a product and can be easily traced to the product.