eBook Payout Ratio and Book Value per Share Divac Company has developed a statement of stockholders' equity for the year 2017 as follows: Preferred Stock Paid-In Capital- Preferred Common Stock Paid-In Capital- Common Retained Earnings $200,000 Balance, Jan. 1 $100,000 $50,000 $40,000 $400,000 100,000 Stock issued 10,000 Net income 85,000 Cash dividend -43,000 Stock dividend 10,000 5,000 -15,000 Balance, Dec. 31 $110,000 $55,000 $500,000 $50,000 $227,000 Divac's preferred stock is $100 par, 8% stock. If the stock is liquidated or redeemed, stockholders are entitled to $120 per share. There are no dividends in arrears on the stock. The common stock has a par value of $4 per share. Assume that the common stockholders have a right to the total net income of $85,000. Required: 1. Determine the dividend payout ratio for the common stock. Round the payout ratio to four decimal places, but enter as a percentage to two decimal places. For example, .34678 rounds to .3468 and would be entered as 34.68, indicating 34.68%. 56.25 X % 2. Determine the book value per share of Divac's common stock. Round the book value per share to two decimals. 8.03 X per share Feedback Check My Work 1) Dividend payout measures cash dividends on common stock to net income. 2) Book value measures Total stockholders' equity (adjusted for preferred stock liquidation value) to shares of common stock