?
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.
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.
Join the Discussion
Login to post a comment or share your explanation.
LoginDPS÷EPS×100=2/4×100=50%
= Dividend Per Share (DPS) / Earning Per Share * 100
= 2 / 4 * 100
= 0.5 * 100
= 50 %
So, the answer D is right.