Information from the Financial Statements Is Provided in the Following

question 186

Multiple Choice

Information from the financial statements is provided in the following table:
$\begin{array}{lrr}&\text { Year } 2&\text { Year } 1\\\text { Net income } & \$ 150,000 & \$ 120,000 \\\text { Cash dividends paid on preferred shares } & 15,000 & 15,000 \\\text { Cash dividends paid on common shares } & 42,000 & 38,000 \\\text { Average number of preferred shares outstanding } & 20,000 & 20,000 \\\text { Average number of common shares outstanding } & 105,000 & 95,000 \\\text { Market price per share of common shares at year end } & 25.10 & 22.70\end{array}$
-Refer to the figure Randstad Inc.What is the dividend payout ratio for Year 2?

• A) 10%
• B) 28%
• C) 32%
• D) 38%

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Definitions:

Tsp (Teaspoon)

A unit of measure commonly used in cooking to quantify volume, equal to about 5 milliliters.

mL

Milliliter, a unit of volume in the metric system, equal to one thousandth of a liter, commonly used to measure liquids in medicine.

Scored Tablets

Tablets with a groove marked on them to make it easier to break or split the tablet into smaller doses for consumption.

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A medicated patch applied to the skin that releases nitroglycerin over time, used to prevent chest pain (angina) by increasing blood flow to the heart.