Multiple choice

______ ratio expresses the relationship between what is available as earnings per share and what is actually paid in the form of dividends out of available earnings.

  1. Price earning

  2. Payout

  3. Dividend yield

  4. Debt equity
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The payout ratio is the percentage of net income that a company pays out as dividends to common shareholders. The ratio is calculated as the percentage of earnings paid out as dividends.

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