Question

JJICU CUI 3 vuesuun Help The board of Kopi Industries is considering a new dividend policy that would set dividends at 55% of earnings. The recent past has witnessed earnings per share (EPS) and dividends paid per share as follows: E. Based on Kopi's historical dividend payout ratio, discuss whether a constant payout ratio of 55% would be suitable for the firm The dividend payout ratio in 2016 is %. (Round to two decimal places.) i Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Year 2016 2017 EPS $1.75 $1.95 $2.05 $2.25 Dividend/share $0.90 $1.12 $1.15 $1.19 2018 Enter your answer in the answer box and then click Check Answer 2019 4 parts * remaining

Answer 1

Year	EPS ($)	Dividend per share *$)	Dividend payout ratio (%) = (Dividend per share/EPS)*100
2016	1.75	0.90	(0.90/1.75)*100= 51.43%
2017	1.95	1.12	(1.12/1.95)*100= 57.44%
2018	2.05	1.15	(1.15/2.05)*100= 56.10%
2019	2.25	1.19	(1.19/2.25)*100= 52.89%

The dividend payout ratio in 2016 is 51.43%

It is seen that the dividend payout ratio for the years 2017 and 2018 was above 55%. Though decreased marginally in the year 2019, it is almost at that rate, at 52.89%. Going by the historical payout ratio, a constant payout ratio of 55% is suitable to the company.