A business with 10,000 shares of $2.00 par value common stock has earnings per share of $5.00, pays dividends of $1.00 per share, and has a market value of $10.00 per share. The dividend ratio is

Question

Quizplus · Accepted Answer

The dividend ratio, also known as the dividend payout ratio, is calculated by dividing the dividends per share by the earnings per share. In this case, it's $1.00 / $5.00 = 0.20 or 20%.

A Business with 10,000 Shares of $2