Helmuth Inc's latest net income was $1,500,000, and it had 225,000 shares outstanding. The company wants to pay out 45% of its income. What dividend per share should it declare? Do not round your intermediate calculations.

a. $3.24

b. $2.31

c. $3.21

d. $2.28

e. $3.00

e. $3.00

Explanation:

For computing the dividend per share, first, we have to apply the dividend pay out ratio which is shown below:

Dividend = Net income * Dividend payout ratio

= $1,500,000 * 45%

= $675,000

Now the dividend per share would be

Dividend per share = (Total dividend) : (number of shares)

= ($675,000) : (225,000 shares)

= $3 per share