Helmuth inc's latest net income was $1,500,000, and it had 225,000 shares outstanding. the company wants to pay out 45% of its income. what dividend per share should it declare? do not round your intermediate calculations.

a. $3.24
b. $2.31
c. $3.21
d. $2.28
e. $3.00

e. $3.00

Explanation:

For computing the dividend per share, first, we have to apply the dividend pay out ratio which is shown below:

Dividend = Net income × Dividend payout ratio

               = $1,500,000 × 45%

               = $675,000

Now the dividend per share would be

Dividend per share = (Total dividend) ÷ (number of shares)

                                = ($675,000) ÷ (225,000 shares)

                                = $3 per share

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