BVI Corporation Had Net Income of $1,600,000 and Paid Dividends

question 73

Multiple Choice

BVI Corporation had net income of $1,600,000 and paid dividends to common stockholders of $400,000 in 2014. The weighted average number of shares outstanding in 2014 was 500,000 shares. BVI Corporation's common stock is selling for $50 per share on the NASDAQ. BVI Corporation's payout ratio for 2014 is

• A) $5 per share.
• B) 25%.
• C) 20%.
• D) 12.5%.

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Definitions:

FOB Destination

Freight terms in which the seller pays the transportation costs from the shipping point to the final destination.

Net Income

The total earnings of a company after deducting all expenses and taxes from total revenue.

Ending Inventory

The total value of all unsold goods that a company has at the end of an accounting period.

Beginning Inventory

The value of the inventory that a company has at the start of an accounting period, before any purchases or sales have occurred.