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Problem

ConsistoCo has a policy to maintain a constant payout ratio from year to year. During the previous fiscal year, net income totaled $1,200,000 and ConsistoCo paid $240,000 in dividends. This year, due to the settlement of a lawsuit, the company had net income of $700,000. What amount of dividends would investors expect ConsistoCo to declare this year?

2:23m

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