Asked by alonna michaux on Jul 13, 2024
Verified
The dividend payout ratio is defined as cash dividends divided by:
A) Sales.
B) Net income.
C) Total assets.
D) Retained earnings.
E) Total equity.
Cash Dividends
Money paid to shareholders by a corporation, typically a share of the company’s profits.
Dividend Payout Ratio
A financial ratio that measures the percentage of net income a firm pays out to its shareholders as dividends.
- Understand the significance of dividends, the debt-equity ratio, and the payout ratio within the context of financial planning.
Verified Answer
MS
Marisa SerohijosJul 17, 2024
Final Answer :
B
Explanation :
The dividend payout ratio is calculated by dividing the total amount of dividends paid to shareholders by the company's net income. This ratio shows what portion of the net income is being paid out as dividends.
Learning Objectives
- Understand the significance of dividends, the debt-equity ratio, and the payout ratio within the context of financial planning.