The dividend payout ratio is the proportion of each dollar of earnings that is paid to shareholders as a dividend; equals one minus the retention rate.

Question

Quizplus · Accepted Answer

The dividend payout ratio indeed measures the proportion of earnings paid out to shareholders as dividends, and it is the complement of the retention rate, which represents the proportion of earnings retained by the company for reinvestment.

The Dividend Payout Ratio Is the Proportion of Each Dollar