Groeneweg Corporation Has Provided the Following Data: Dividends on Common

question 230

Multiple Choice

Groeneweg Corporation has provided the following data: Dividends on common stock during Year 2 totaled $4,500.The market price of common stock at the end of Year 2 was $9.45 per share.The company's dividend payout ratio for Year 2 is closest to:

• A)8.7%
• B)13.4%
• C)4.5%
• D)1.0%

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Definitions:

Capital Needs

The financial requirements a company has for carrying out its operations and investments, including the purchasing of assets and funding of projects.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer.

Paid-In Capital

The amount of money that a company has received from shareholders in exchange for shares of stock.

Retained Earnings

The portion of net profits that are kept in the company rather than distributed to shareholders as dividends, often used for reinvestment in the business.