Question

Dividends per Share The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars, except earnings per share.) 2016 Sales revenue Cost of goods sold Net income Dividends Earnings per share $210,000 125,000 8,800 3,100 4.40 Hi-Tech Instruments, Inc. Balance Sheet (Thousands of Dollars) Dec. 31, 2016 Dec. 31, 2015 Assets Cash $18,300 $18,000 Accounts receivable (net) 46,000 41,000 Inventory 39,500 43,700 Total current assets 103,800 102,700 Plant assets (net) 52,600 50,500 Other assets 15,600 13,800 Total assets $172,000 $167,000 Liabilities and Stockholders' Equity Notes payable-banks $6,000 $6,000 Accounts payable 22,500 18,700 Accrued liabilities 16,500 21,000 Total current liabilities 45,000 45,700 996 Bonds payable 40,000 40,000 Total liabilities 85,000 85,700 Common stock, $25 par value (2,000,000 shares) 50,000 50,000 Retained earnings 37,000 31,300 Total stockholders' equity 87,000 81,300 Total liabilities and stockholders' equity $172,000 $167,000 Calculate the company's dividends paid per share of common stock for 2016. Round answer to two decimal places. $ 62.25

Answer 1

1) Dividend per share of common stock for 2016 = (Total dividends for 2016 - Preferred dividends for 2016) / # of common shares outstanding Total dividends for 2016 Preferred dividends for 2016 Common dividends paid in 2016 # of common shares outstanding in 2016 Dividend per share of common stock for 2016 $3,100,000 $0 (There is no preferred capital on balance sheet] $3,100,000 2,000,000 $1.55 ($3100000 / 2000000 shares) 2) Dividend payout ratio = (Total dividends / Net income) x 100 Total dividends Net income Dividend payout ratio $3,100,000 $8,800,000 35.2% [($3100000 / $8800000) x 100]