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1 May, 00:46

Guo Company has stockholders' equity of $400,000 and net income of $66,000. It has a payout ratio of 20% and a return on assets of 15%. How much did Guo pay in cash dividends, and what were its average assets.

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  1. 1 May, 00:57
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    Dividends paid=$132

    Average total assets=$440.000

    Explanation:

    You must follow the formula below to find out the Dividends Paid by Guo Company

    Payout ratio = (dividends paid/net earnings for the period) x 100 then,

    Dividends paid = (Payout Ratio/100) x net earnings for the period

    Dividends paid = (20%/100) x$66.000

    Dividends paid=$132

    2. You must follow the formula below to find out the Average total assets

    Return Over Assets = (Net Income / Average total Assets) then,

    Average total assets = (Net income/Return Over Assets)

    Average total assets = ($66.000/15%)

    Average total assets=$440.000
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