The Cruise Ship Co

question 35

Multiple Choice

The Cruise Ship Co.has taxable income of $4,000,000.The company paid out $550,000 in interest expense.The tax rate is 35 percent and the dividend payout ratio is 30 percent.What is the amount that was paid out in dividends?

• A) $420,000
• B) $550,000
• C) $682,500
• D) $780,000
• E) $980,000

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Definitions:

Present Value Factors

Multipliers used to calculate the present value of a sum to be received in the future by accounting for time value of money.

Minimum Rental Payments

The lowest amount of payment due under a lease agreement, which includes both the principal and interest components for a lease.

Latest Balance Sheet

The most recent statement of a company’s financial position, showing assets, liabilities, and equity at a specific point in time.

Succeeding Fiscal Years

The periods following the current fiscal year, typically referring to future financial or budgetary planning years.