Presented Below Are Selected Data from the Financial Statements of DeBruce

question 149

Multiple Choice

Presented below are selected data from the financial statements of DeBruce Corp. for 2014 and 2013. $\begin{array}{lrr}&2014&2013\\\text { Net income } & \$ 110,000 & \$ 123,000 \\\text { Cash dividends paid on common stock } & \$ 42,000 & \$ 38,000 \\\text { Market price per share of common stock at the end of the year } & \$ 16.00 & \$ 13.00 \\\text { Earnings per share } & \$ 0.84 & \$ 0.74 \\\text { Shares of common stock outstanding } & 140,000 & 100,000\end{array}$ The dividend payout ratio for 2014 is

• A) 0.382.
• B) 0.05.
• C) 0.28.
• D) 0.50.

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Definitions:

Depositary Banks

Financial institutions that hold and manage securities for their clients, offering services such as safekeeping, collection of dividends, and exercise of rights.

Drawee Bank

A bank upon which a check or draft is drawn and is responsible for paying the amount to the individual or entity presenting it for payment.

Agent

A person authorized to act on behalf of another, known as the principal, in business transactions or other matters.

Stop Payment Order

A request made to a financial institution to cancel or halt the processing of a check or payment transaction.