what is meant by the term dividend payout ratio?

Answer 1

Dividend Payout Ratio
The percentage of earnings paid to shareholders in dividends.

Calculated as:





The payout ratio provides an idea of how well earnings support the dividend payments. More mature companies tend to have a higher payout ratio.

In the U.K. there is a similar ratio, which is known as dividend cover. It is calculated as earnings per share divided by dividend per share.

Answer 2

Dividend pay out ratio - The portion of net income that is paid to the investors as dividends. The dividend payout ratio measures the percentage of a company's net income that is returned to shareholders in the form of dividends.

Formula:

DPR = Total Dividend Payments/Net income +Non cash expenses - non cash sales

Answer 3

The profit returns from a company after tax, as approved and agreed at AGMS or equivalent, distributed in the form of dividends to preference share holders, in relation to;

the amount used to generate cash from equity shareholders and debt borrowings, bearing in mind recent IFRS changes require preference shares to be classified as Debt capital and not Equity;

in otherwards, the amount of cash available for distribution after taxes to preference share holders after considering equity and debt requirements to support that notional payout, ( with preference share holder priorty to first claim over equity holders.)