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:

Analytical Skills

The ability to identify relevant issues, recognize their importance, understand the relationships between them, and perceive the underlying causes of a situation.