In finance, the dividend payout ratio is a way of measuring the fraction of a company's earnings that are paid to investors in the form of dividends rather than being re-invested in the company in a given time period (usually one year). In general, companies with higher dividend ratios tend to be older, more established companies that have already grown significantly, while companies with low pay out ratios tend to be younger companies with high growth potential. To find a business's dividend payout ratio for a given time period, use either the formula Dividends paid/Net income or Yearly dividends per share/Earnings per share — both are equivalent.
No comments:
Post a Comment