Extruded Elements Extruded Elements Had Net Income of $25,000,000 Last Year, and Year

question 3

Multiple Choice

Extruded Elements
Extruded Elements had Net Income of $25,000,000 last year, and $26,250,000 this year (in line with its long-term earnings growth rate) . There are 4,000,000 shares outstanding, and the firm follows a policy of paying 30% of its earnings out as dividends
-If Extruded Elements increases its payout ratio to 40% of earnings next year,but its expected growth rate remains constant,what is its expected dividend?

• A) $4.13 per share
• B) $2.63 per share
• C) $3.94 per share
• D) $2.76 per share

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Definitions:

Quantity of Y

A term indicating the amount or volume of a product or commodity denoted by 'Y', often measured in units or quantities.

Downsloping Demand Curve

Illustrates the inverse relationship between the price of a good or service and the quantity demanded, indicating that demand decreases as price increases.

Budget Line

A graphical representation showing the combination of two goods that a consumer can purchase with a given budget at prevailing prices.

Money Income

The total cash earnings received by an individual or household, including wages, salaries, benefits, and income from investments.