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Compute the dividend payout ratio for year

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Reference no: EM131808860

Lundberg Corporation's most recent balance sheet and income statement appear below:

 

Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars)
  Year 2 Year 1
  Asset:        
  Current assets:        
  Cash $ 180   $ 190  
  Accounts receivable   290     300  
  Inventory   190     180  
  Prepaid expenses   15     15  
 
  Total current assets   675     685  
  Plant and equipment, net   952     932  
 
  Total assets $ 1,627   $ 1,617  
 
  Liabilities and stockholders' equity:        
  Current liabilities:        
  Accounts payable $ 240   $ 230  
  Accrued liabilities   130     130  
  Notes payable, short term   180     190  
 
  Total current liabilities   550     550  
  Bonds payable   270     320  
 
  Total liabilities   820     870  
 
  Stockholders' equity:        
  Preferred stock, $100 par value, 10%   280     280  
  Common stock, $1 par value   100     100  
  Additional paid-in capital--common stock   110     110  
  Retained earnings   317     265  
 
  Total stockholders' equity   807     755  
 
  Total liabilities and stockholders' equity $ 1,627   $ 1,625  
 

 

Income Statement
For the Year Ended December 31, Year 2
(in thousands of dollars)
  Sales (all on account) $ 1,490  
  Cost of goods sold   866  
 
  Gross margin   624  
  Selling and administrative expenses   406  
 
  Net operating income   218  
  Interest expense   47  
 
  Net income before taxes   171  
  Income taxes (30%)   51  
 
  Net income $ 120  
 

Dividends on common stock during Year 2 totaled $40 thousand. The market price of common stock at the end of Year 2 was $9.34 per share.

Compute the dividend payout ratio for Year 2. (Do not round intermediate calculations. Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Reference no: EM131808860

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