A firm paid a dividend of $1.68 per share this year and had earnings of $4.25 a share. The market price of its stock is $50.90. What is its dividend payout ratio?

Question

Quizplus · Accepted Answer

Dividend payout ratio = Dividend per share / Earnings per share
Therefore, dividend payout ratio = $1.68/$4.25 = 0.395 or 39.5%
The correct answer is option C). Dividend payout ratio = Dividends per share / Earnings per share
Dividends per share = $1.68
Earnings per share = $4.25
Dividend payout ratio = $1.68 / $4.25 = 0.395 or 39.5%
Therefore, the correct answer is choice C.

A Firm Paid a Dividend of $1