Math/Applied mathA company has a net income of Rs. 1,20,000 and a dividend payout ratio of 40%. The  company has 1,00,000 outstanding shares with a market value of Rs. 20 per share.

A company has a net income of Rs. 1,20,000 and a dividend payout ratio of 40%. The  company has 1,00,000 outstanding shares with a market value of Rs. 20 per share.

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    Solution:

    Calculation of Total Dividends Paid: The dividend payout ratio indicates the portion of net income that the company pays out as dividends to shareholders. Given a 40% dividend payout ratio and a net income of Rs. 1,20,000, we can calculate the total dividends paid by the company. Total Dividends = Net Income × Dividend Payout Ratio Total Dividends=Net Income×Dividend Payout Ratio Total Dividends = 1 , 20 , 000 × 0.40 Total Dividends=1,20,000×0.40 Dividend Per Share: The total dividends paid will be divided among the outstanding shares to determine the dividend per share. Dividend Per Share = Total Dividends Number of Outstanding Shares Dividend Per Share=Number of Outstanding SharesTotal Dividends​ Dividend Per Share = Total Dividends 1 , 00 , 000 Dividend Per Share=1,00,000Total Dividends​ Let's calculate these values. The company pays out a total of Rs. 48,000 in dividends. The dividend per share is Rs. 0.48. ​
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