Suppose a Firm Pays Total Dividends of $50,000 Out of Net

question 16

Multiple Choice

Suppose a firm pays total dividends of $50,000 out of net income of $500,000. What would the firm's payout ratio be?

• A) 0.10
• B) 1.00
• C) 10.00
• D) 50.00

---

Definitions:

Financial Statements

Structured records that convey the financial activities and conditions of a business, entity, or individual, including the balance sheet, income statement, and cash flow statement.

Management's Objectives

The specific goals set by a company's management intended to guide decision-making and strategic planning for business success.

IFRS for SMEs

A simplified, self-contained set of accounting principles intended for smaller, less complex entities, based on the full International Financial Reporting Standards (IFRS).

Full IFRS

The complete set of International Financial Reporting Standards that companies may be required to comply with.