] Zippy Company has 50,000 shares of stock outstanding and projects the following net income over...

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] Zippy Company has 50,000 shares of stock outstanding and projects the following net income over...

]

Zippy Company has 50,000 shares of stock outstanding and projects the following net income over the next four years.

Year	Net Income
2020	$90,000
2021	$120,000
2022	$85,000
2023	$135,000

Zippy pays a small regular dividend of $0.75 plus an extra 40% of profits when net income is higher than $100,000. What is the dividend payment for 2023?

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Answer 1

Answer #1

Solution:

The net income is $135,000 in the year 2023 and it is more than $100,000. It means that the company will pay 40% of the total profit as dividends along with $0.75 per share.

Total share of the company = 50,000

Total Dividend in dollars = 50000 *0.75 + 135000*40% = 91,500

Dividend per share = Total dividend / Shares = 91,500 / 50,000 = $1.83

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Answer 2

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] Zippy Company has 50,000 shares of stock outstanding and projects the following net income over...

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