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QRW, Inc. has a retained earnings balance of $2,000,000. The company reported net income of $600,000, sales of $4,000,000, and has 200,000 shares of common stock outstanding. The company announced a dividend of $2.00 per share. Therefore the company's dividend payout ratio is A) 66.7%. B) 50%. C) 20%. D) 10%.

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ayune

The company has net income of $600,000,  200,000 shares of common stock, and announced a dividend of $2.00 per share. The company's dividend payout ratio is 66.7% (option A)

The Dividend Payout Ratio (DPR) is the ratio of dividends paid to shareholders to total net income generated by the company.

Dividend Payout ratio can be calculated as:

DPR = dividends per share / earning per share

or

DPR = dividends / net income

In the given problem:

net income =  $600,000

dividends per share = $2

common stock = 200,000

Hence,

dividends = dividends per share x number of shares

                 = 2 x 200,000 = 400,000

DPR = 400,000 / 600,000 = 66.7%  (option A)

Learn more about dividend here:

https://brainly.com/question/13083753

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