Question

Ivanhoe Corporation had the following information in its financial statements for the year ended 2025 and 2026: Common cash dividends for the year 2026 $19600 Net income for the year 2026 122000 Market price of stock, 12/31/26 24 Common stockholders' equity, 12/31/25 2100000 Common stockholders' equity, 12/31/26 2610000 Outstanding shares, 12/31/26 152600 Preferred dividends for the year 2026 29900 What is the payout ratio for Ivanhoe Corporation for the year ended 12/31/2026?

Answer 1

The payout ratio for Ivanhoe Corporation for the year ended 12/31/2026 is 21.28%, which is calculated by dividing the common cash dividends by the net income available to common shareholders after deducting preferred dividends.

Step-by-step explanation:

The payout ratio for Ivanhoe Corporation for the year ended 12/31/2026 can be calculated by dividing the common cash dividends paid to common shareholders by the net income available to common shareholders. The net income available to common shareholders is found by subtracting the preferred dividends from the reported net income. In this case:

Net Income Available to Common Shareholders = Net Income - Preferred Dividends
Net Income Available to Common Shareholders = $122,000 - $29,900
Payout Ratio = Common Cash Dividends / Net Income Available to Common Shareholders
Payout Ratio = $19,600 / ($122,000 - $29,900)
Payout Ratio = $19,600 / $92,100
Payout Ratio = 0.2128 or 21.28%

The payout ratio for Ivanhoe Corporation is 21.28%, meaning the company pays out approximately 21.28% of its net income to common shareholders as dividends.