A company has an annual dividend growth rate of 5% and a retention rate of 40%. The company's dividend payout ratio is
A) 35%.
B) 40%.
C) 45%.
D) 60%.

Name: A company has an annual dividend growth rate of 5% and a retention rate of 40%. The company's dividend payout ratio is A) 35%. B) 40%. C) 45%. D) 60%.
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Question

Quizplus · Accepted Answer

The dividend payout ratio is the opposite of the retention rate. If the company retains 40% of its earnings, it pays out 60% as dividends.

A Company Has an Annual Dividend Growth Rate of 5