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Accounting
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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

Answer & Solution
Correct Answer: Option D
The dividend payout ratio shows what percentage of a company's earnings are paid out to shareholders as dividends.

We can calculate it using the following formula:

Dividend Payout Ratio = (Dividend per Share / Earnings per Share) * 100

In this case:
* Dividend per share = Rs. 2
* Earnings per share = Rs. 4

So, the calculation is:
(Rs. 2 / Rs. 4) * 100 = 0.5 * 100 = 50%

Therefore, the dividend payout ratio is 50%. This means the company is paying out half of its earnings as dividends.
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2 Comments
Shehina Firoz
Shehina Firoz 1 year ago
Dividend payout ratio= dividend per share divided by earning per share into 100
DPS÷EPS×100=2/4×100=50%
Abdul Muqeet
Abdul Muqeet 3 years ago
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.