A company has a total revenue of 750 lakhs, operating expenses of $30 lakhs, and a tax rate of 35%. If the company pays out 50% of its net income as dividends, what is the dividend per share if there are 710 lakh shares outstanding

To determine the dividend per share, we'll follow these steps:

### Step 1: Calculate the Net Income
Net Income is calculated by subtracting operating expenses and taxes from the total revenue.

1. **Revenue**: 750 lakhs
2. **Operating Expenses**: 30 lakhs

**Net Operating Income (before tax)** = Revenue - Operating Expenses
\[
\text{Net Operating Income} = 750 - 30 = 720 \text{ lakhs}
\]

Now, apply the tax rate of 35% to find the after-tax income:

\[
\text{Tax} = 720 \times 0.35 = 252 \text{ lakhs}
\]

**Net Income (after tax)** = Net Operating Income - Tax
\[
\text{Net Income} = 720 - 252 = 468 \text{ lakhs}
\]

### Step 2: Calculate the Total Dividend
The company pays out 50% of its net income as dividends:

\[
\text{Total Dividend} = 468 \times 0.50 = 234 \text{ lakhs}
\]

### Step 3: Calculate the Dividend per Share
To find the dividend per share, divide the total dividend by the number of shares outstanding:

\[
\text{Dividend per Share} = \frac{234 \text{ lakhs}}{710 \text{ lakhs shares}} = \frac{234}{710} = 0.33 \text{ lakhs per share}
\]

Thus, the dividend per share is **0.33 lakhs per share**.

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Would you like more details or have any questions?

Here are some related questions you might consider:
1. How would the dividend per share change if the company increased its payout ratio to 60%?
2. What would be the impact on the dividend per share if the number of shares outstanding increased?
3. How does changing the tax rate affect the net income and subsequently the dividend per share?
4. What is the earnings per share (EPS) before the dividends are paid out?
5. How would an increase in operating expenses affect the dividend per share?

**Tip:** Always double-check the tax application in financial calculations, as it can significantly impact the net income and subsequent figures.

Learn how to calculate the dividend per share using financial data total revenue of 750 lakhs, operating expenses of 30 lakhs, and a tax rate of 35%. This problem involves calculating net income, determining total dividends, and computing the dividend per share based on 710 lakh shares outstanding.

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