Assume the Following Data: Earnings Per Share = $5; Dividends

question 35

Multiple Choice

Assume the following data: Earnings per share = $5; Dividends per share = $3; Price per share = $50.Calculate the payout ratio.

• A)10 percent
• B)5 percent
• C)60 percent
• D)8.3 percent

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Definitions:

Internal Control

Systems and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Cash Shortages

The situation where the cash on hand is less than the expected amount, often indicating errors or theft.

Accounts Payable

Liabilities of a business that represent amounts owed to creditors for goods and services purchased on credit.

Cash Account

An account that records all transactions involving cash inflows and outflows.