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Assume that retained earnings at the beginning of the year amounted to $717,500 and that net income for the year was $3,970,000. What was the dividend declared during the year on each share of common stock? (Hint: Net income increases retained earnings, whereas dividends decrease retained earnings.)

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mltn1980

Answer:

$ 4.687.500 / Total Shares Common Outstanding.

Explanation:

With the information available we can assume that the total balance of the Retained Earning at the end of the period it's zero.

Under these assumptions we infere that the total amount available will be declared as dividend, to this case it's the balance of retained earnings plus the Net Income of the current year, $ 4.687.500.

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