Question : Profit in an organization is equal to Rs. 500000 after interest, tax, and dividends on preferred shares. There are 50,000 equity shares and a 50% dividend payout ratio. What amount of dividend payment will there be?
Option 1: Rs. 5
Option 2: Rs. 25
Option 3: Rs. 10
Option 4: Rs. 12
Answer (1)
24th Jan, 2024
Correct Answer: Rs. 5
Solution :
Earning Per Share = 5,00,000/50,000 = 10
Dividend payout = Earning Per Share× dividend payout rate = 5
Dividend payout = 10 × 50% = 5
Hence option 1 is the correct answer.
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