The Costco Wholesale Corporation (COST) operates membership warehouses that offer a wide variety of branded and private-label

Question:

The Costco Wholesale Corporation (COST) operates membership warehouses that offer a wide variety of branded and private-label products in no-frills, self-service warehouse facilities. In 2008 the company paid total cash dividends of $265,029,000 and had net income of $1,282,725,000.

a. What was the firm’s dividend payout ratio?

b. If Costco were to earn $1.5 billion in 2009 and maintained the same dividend payout ratio that it paid in 2008, what would the firm’s dividends be?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...