Payout Ratio and Book Value per Share Divac Company has developed a statement of stockholders€™ equity for the year 2010 as follows:

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 $5 per share.

Required

1. Determine the dividend payout ratio for the common stock.

2. Determine the book value per share of Divac€™s commonstock.

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Paid-In Preferred Stock Capital Preferred Common Stock Paid-In Capital- Common Retained Earnings $100,000 $50,000 $400,000 Balance, Jan. 1 Stock issued Net income Cash dividend Stock dividend Balance, Dec. 31 $40,000 $200,000 100,000 10,000 80,000 -45,000 -15,000 $50,000 $220,000 5,000 10,000 $110,000 $55,000 $500,000