If the face value of share is Rs. 10, earning per share is Rs. 4 and dividend per share is Rs. 2, then dividend payout ratio will be
A. 20%
B. 40%
C. 25%
D. 50%
Answer: Option D
This Question Belongs to Commerce >> Accounting
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Formula of finding Dividend payout ratio is:
= Dividend Per Share (DPS) / Earning Per Share * 100
= 2 / 4 * 100
= 0.5 * 100
= 50 %
So, the answer D is right.