1)Sewell Enterprises earned $175 million last year and retained $145 million.

What is the payout ratio?(Round the final answer to 1 decimal place.)

Payout ratio%

2)The Western Pipe Company has the following capital section in its balance sheet. Its stock is currently selling for $5 per share.

Common stock (50,000 shares) $100,000

Retained earnings 250,000

$350,000

The firm intends to first declare a 10 percent stock dividend and then pay a $0.20 cash dividend (which also causes a reduction of retained earnings).

Show the capital section of the balance sheet after the first transaction and then after the second transaction.

Western Pipe CompanyAfter 1^sttransaction

Common stock (55,000 shares)$

Retained earnings$

Western Pipe CompanyAfter 2^ndtransaction

Common stock (55,000 shares)$

Retained earnings$