Information from the Financial Statements Is Provided in the Following

question 20

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 yield ratio for Year 2?

• A) 1.6%
• B) 1.8%
• C) 2.6%
• D) 3.0%

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Definitions:

Consumer Goods

Finished products consumed by individuals or households to satisfy their immediate wants or needs, such as food, clothing, and electronics.

Limited Partnerships

A form of partnership consisting of one or more general partners, who manage the business and assume legal debts and obligations, and one or more limited partners, who are liable only to the extent of their investments.

Corporate Income Taxes

Taxes imposed on the net income or profit of corporations, calculated after deducting expenses like cost of goods sold and wages.

Expected Profit Rate

The forecasted return on an investment or business venture, calculated as the potential profit over time divided by the initial cost.