Use the following information to answer the next two questions.Farley Corporation had net income of $160,000 and paid dividends of $40,000 to common stockholders and $20,000 to preferred stockholders in 2007. Farley Corporation’s common stockholders’ equity at the beginning and end of 2007 was $450,000 and $550,000, respectively.22. Farley Corporation’s return on common stockholders’ equity isa. 32%.b. 28%.c. 24%.d. 20%.23. Farley Corporation’s payout ratio for 2007 isa. $5 per share.b. 25%.c. 20%.d. 12.5%.
Hi,Thanks for the question. 22. b. 28%ROCE = (net income - preferred dividends) / average common stockholder's equity = (160,000 -20,000) / (450,000+550,000)/2 = 140,000 / 500,000 = 0.28 = 28%23. b. 25%.Payout = common dividends / net income = 40,000 / 160,000 = 0.25 = 25%If you would like to request me for future posts, please put 'For Bizhelp' at the beginning of them.Hope this helps!
BA degree and Certified Public Accountant
are you online? i have a handout due in 1.5 hours and i am desperate.
Sorry I missed you. I was busy with some other matters tonight. Please try to allow at least 24 hours notice for any exercises such as this. Thanks.
Ok I will. my group was desperate. I will look at everything we need in the morning. Can you do a handout?
I'm not sure what a handout is. If it is essay type of questions, no, I don't normally do those type. Please remember to open a new post for any new questions. Thanks.