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Back to Assignment Attempts: Average: /2 Attention: Due to a bug in Google Chrome, this page may not function correctly. Click here to learn more. Aa Aa 5. Stockholders' equity The right side of the balance sheet shows the firm's liabilities and stockholders' equity. Which of the following best describes shareholders' equity? O Equity is the difference between the company's assets and retained earnings. O Equity is the sum of shareholders' capital provided by shareholders and retained earnings. NOW Inc. released its annual results and financial statements. Grace is reading the summary in the business pages of today's paper. In its annual report this yeat, NOW Inc. reported a net income of $160 million. Last year, the company reported a retained earnings balance of $476 million, whereas this year it increased to $560 million. How much was paid out in dividends this year? O $76 million $4 million O $244 million O $385 million

Explanation / Answer

1)

Equity is the sum of shareholders capital provided by shareholders and retained earnings

Shareholders equity = Total assets - total liabilites which is equal to sharholders and retained earnings

2)

Retained earnings = 560 - 476 = $84

Dividends paid out = 160 - 84

Dividends paid out = $76 million

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