Crane Corp. has revenues of $12,338,000, costs of $9,253,500, interest payments of $414,800, and a tax...

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Crane Corp. has revenues of $12,338,000, costs of $9,253,500, interest payments of $414,800, and a tax...

Crane Corp. has revenues of $12,338,000, costs of $9,253,500, interest payments of $414,800, and a tax rate of 34 percent. It paid dividends of $930,000 to its stockholders. What are the firm’s dividend payout ratio and retention ratio?

Dividend payout ratio %

Retention rate %

business finance

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Answer 1

Answer #1

Net Income = (Revenues - Costs - Interest Payments) * (1 - Tax)

Net Income = ($12,338,000 - $9,253,500 - $414,800) * (1 - 34%)

Net Income = $1,762,002

Dividend payout ratio = Dividend paid/Net Income

Dividend payout ratio = $930,000/$1,762,002

Dividend payout ratio = 52.78%

Retention ratio = 1 - Dividend Payout ratio

Retention ratio = 1 - 52.78% = 47.22%

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Answer 2

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Crane Corp. has revenues of $12,338,000, costs of $9,253,500, interest payments of $414,800, and a tax...

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Crane Corp. has revenues of $12,338,000, costs of $9,253,500, interest payments of $414,800, and a tax...

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Blossom Corp. has revenues of $12,298,000, costs of $9,223,500, interest payments of $412,500, and a tax...

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