Answer Happy

Hans Garcia, president of Garcia Corporation, believes that it is a good practice for a company to maintain a constant payout of dividends relative to its earnings. Last year, net income was $670,000, and the corporation paid $174,200 in dividends. This year, due to some unusual circumstances, the corporation had income of $1,520,000. Hans expects next year's net income to be about $770,000. (a1) What was Garcia's payout ratio last year? If it is to maintain the same payout ratio, what amount of dividends would it pay this year? Payout ratio-last year Dividends paid this year $ % 4 C