Practicing Success
Which ratio shows the proportion of earnings that are distributed to the shareholders? |
Dividend Payout Ratio Book Value per Share Price / Earning Ratio None of these |
Dividend Payout Ratio |
The correct answer is option 1- Dividend Payout Ratio. Dividend Payout Ratio refers to the proportion of earning that are distributed to the shareholders. This reflects company’s dividend policy and growth in owner’s equity. It is calculated as – * Dividends per Share: The total dividend paid to shareholders divided by the number of outstanding shares. |