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Basic Question 1 of 13

Flower Buds has had a very successful year and earnings are $72,000. The company has 60,000 shares outstanding and will pay a dividend of $0.50 per share. What are the dividend payout ratio and the retained earnings for the year?

A. 71.43%; $42,000.
B. 71.43%; $30,000.
C. 41.67%; $42,000.

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Colin Sampaleanu

Learning Outcome Statements

compare stable dividend with constant dividend payout ratio, and calculate the dividend under each policy;

describe broad trends in corporate payout policies;

CFA® 2025 Level II Curriculum, Volume 3, Module 16.