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14 March, 19:14

Emerson Inc. would like to undertake a policy of paying out 45% of its income. Its latest net income was $1,250,000, and it had 225,000 shares outstanding.

What dividend per share should it declare?

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  1. 14 March, 22:38
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    Emerson Inc. should declare $2.5 per share.

    Explanation:

    Dividend Payout ratio is the ratio of distribution of net income earned during the period among the stockholders.

    As per given data

    Net Income = $1,250,000

    Payout ratio = 45%

    Dividend payment = 1,250,000 x 45% = $562,500

    Dividend per share = $562,500 / 225,000 = $2.5 per share
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