Define Dividend payout ratio

Entrepreneurial Finance
6th Edition
ISBN:9781337635653
Author:Leach
Publisher:Leach
Chapter4: Preparing And Using Financial Statements
Section: Chapter Questions
Problem 8DQ
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Define Dividend payout ratio

Expert Solution
Step 1

Formula to calculate dividend payout ratio - 

Dividend Payout Ratio = Dividends Paid / Net Income 

or

Dividend Pay out Ratio = Dividends Per Share / Earnings Per Share 

or 

Dividend Pay out Ratio = 1- Retention Ratio 

 

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