Problems 18-1 Moon and Sons, Inc, earned $120 million last year and retained $72 million What is the payout ratio? Solution: Moon and sons. Inc Dividends earnings- retained fur $120mil.-$72mil.=$48mil Payout ratio dividends/earnings $48mil/$120mil.=40.0% Ralston Gourmet Foods, Inc. earned $360 million last year and retained $252 million. What is the payout ratio? Solution: Ralston gourmet foods Inc Dividends (earnings -retained funds) ($360m.-$252mi.=$108m Payout ratio dividends/earnings $l80mil/$360mil.=30% CopyrightC 2005 by The McGran-Hill Companies, Inc. S-630Copyright © 2005 by The McGraw-Hill Companies, Inc. S-630 Problems 18-1. Moon and Sons, Inc., earned $120 million last year and retained $72 million. What is the payout ratio? Solution: Moon and Sons, Inc. Dividends = (earnings – retained fund) = $120 mil. – $72 mil. = $48 mil. Payout ratio = dividends/earnings = $48 mil./$120 mil. = 40.0% 18-2. Ralston Gourmet Foods, Inc. earned $360 million last year and retained $252 million. What is the payout ratio? Solution: Ralston Gourmet Foods, Inc. Dividends = (earnings – retained funds) = ($360 mil. – $252 mil. = $108 mil. Payout ratio = dividends/earnings = $180 mil./$360 mil. = 30%