Keyton Corporation's Net Operating Income in Year 2 Was $43,714,net

question 223

Multiple Choice

Keyton Corporation's net operating income in Year 2 was $43,714,net income before taxes was $30,714,and the net income was $21,500.Total common stock was $200,000 at the end of both Year 2 and Year 1.The par value of common stock is $4 per share.The company's total stockholders' equity at the end of Year 2 amounted to $1,148,000 and at the end of Year 1 to $1,130,000.The company declared and paid $3,500 dividends on common stock in Year 2.The market price per share was $8.43 at the end of Year 2.The company's dividend payout ratio for Year 2 is closest to:

• A) 0.8%
• B) 1.8%
• C) 16.3%
• D) 11.4%

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Definitions:

Utilitarian Principle

A philosophical concept that actions are right if they are useful or for the benefit of the majority.

Greatest Happiness

A principle stating that actions are right in proportion as they tend to promote overall happiness, identifying happiness with the maximum pleasure and minimum pain.

Rule Consequentialism

An ethical theory that suggests the moral correctness of an action depends on the consequences of following rules that are designed to promote the greatest good.

Classical Utilitarians

Philosophers such as Jeremy Bentham and John Stuart Mill who advocated for utilitarianism, a moral theory that actions are right if they result in the greatest happiness for the greatest number of people.