Q1Managerial Economics & Financial Accounting
Question
2 marks
What is dividend pay out ratio?
Answer
The dividend payout ratio is the percentage of a company's net income that is distributed to shareholders as dividends.
The Dividend Payout Ratio is a financial metric that indicates the proportion of a company's total earnings (Net Income) that is paid out to its shareholders in the form of dividends.
It is calculated as: (Total Dividends Paid / Net Income) × 100.