Payout Ratio and Book Value per Share Divac Company has developed a statement of stockholders' equity...

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Payout Ratio and Book Value per Share Divac Company has developed a statement of stockholders' equity for the year 2017 as follows: Preferred Stock Paid-In Capital- Preferred Paid-In Common Stock Capital- Retained Common Earnings Balance, Jan. 1 $100,000 $50,000 Stock issued $400,000 100,000 $40,000 $200,000 10,000 Net income 69,000 Cash dividend Stock dividend -56,000 Balance, Dec. 31 10,000 $110,000 5,000 $55,000 $500,000 $50,000 -15,000 $198,000 Divac's preferred stock is $100 par, 8% stock. If the stock is liquidated or redeemed, stockholders are entitled to $120 per share. There are no dividends in arrears on the stock. The common stock has a par value of $10 per share. Assume that the common stockholders have a right to the total net income of $69,000. Required: 1. Determine the dividend payout ratio for the common stock. Round the payout ratio to four decimal places, but enter as a percentage to two decimal places. For example, .34678 rounds to .3468 and would be entered as 34.68, indicating 34.68%. 81.16 % 2. Determine the book value per share of Divac's common stock. Round the book value per share to two decimals. per share Payout Ratio and Book Value per Share Divac Company has developed a statement of stockholders' equity for the year 2017 as follows: Preferred Stock Paid-In Capital- Preferred Paid-In Common Stock Capital- Retained Common Earnings Balance, Jan. 1 $100,000 $50,000 Stock issued $400,000 100,000 $40,000 $200,000 10,000 Net income 69,000 Cash dividend Stock dividend -56,000 Balance, Dec. 31 10,000 $110,000 5,000 $55,000 $500,000 $50,000 -15,000 $198,000 Divac's preferred stock is $100 par, 8% stock. If the stock is liquidated or redeemed, stockholders are entitled to $120 per share. There are no dividends in arrears on the stock. The common stock has a par value of $10 per share. Assume that the common stockholders have a right to the total net income of $69,000. Required: 1. Determine the dividend payout ratio for the common stock. Round the payout ratio to four decimal places, but enter as a percentage to two decimal places. For example, .34678 rounds to .3468 and would be entered as 34.68, indicating 34.68%. 81.16 % 2. Determine the book value per share of Divac's common stock. Round the book value per share to two decimals. per share

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To solve this problem we need to follow these steps 1 Determine the dividend payout ratio for the co... View the full answer