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?