Guo Company has stockholders' equity of $400,000 and net income of $66,000. It has a payout ratio of 20% and a return on assets of 15%. How much did Guo pay in cash dividends, and what were its average assets.

Question

Business

Lexi Herring

29 May, 11:34

Guo Company has stockholders' equity of $400,000 and net income of $66,000. It has a payout ratio of 20% and a return on assets of 15%. How much did Guo pay in cash dividends, and what were its average assets.

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Answers (1)

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Gretel · Answer 1

Dividends paid=$132

Average total assets=$440.000

Explanation:

You must follow the formula below to find out the Dividends Paid by Guo Company

Payout ratio = (dividends paid/net earnings for the period) x 100 then,

Dividends paid = (Payout Ratio/100) x net earnings for the period

Dividends paid = (20%/100) x$66.000

Dividends paid=$132

2. You must follow the formula below to find out the Average total assets

Return Over Assets = (Net Income / Average total Assets) then,

Average total assets = (Net income/Return Over Assets)

Average total assets = ($66.000/15%)

Average total assets=$440.000