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Herman Corporation Had Net Income of $120,000 and Paid Dividends

Question 35

Multiple Choice

Herman Corporation had net income of $120,000 and paid dividends of $24,000 to common stockholders and $20,000 to preferred stockholders in 2014. Herman Corporation's common stockholders' equity at the beginning and end of 2014 was $450,000 and $550,000, respectively. Herman Corporation's payout ratio for 2014 is


A) 5%.
B) 20%.
C) 17%.
D) 10%.

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