This year a company's net income was $400,000 and dividends of $100,000 were paid. What are...

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This year a companys net income was $400,000 and dividends of $100,000 were paid. What are forecasted dividends if the compa

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Answer 1

Answer #1

Answer: Correct answer is $112500

Dividend payout ratio=(Dividends)/Net income
=100000/400000=0.25

If the company wants to keep same payout ratio, then the forecasted dividends will be;
=(Forecasted sales)*(Dividend payout ratio)
=(450000)*(0.25)
=112500

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Answer 2

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