The market price of XYZ Company's common shares dropped from $25 to $21 per share.The dividend paid per share remained unchanged.How would the company's dividend payout ratio change?
A) Increase.
B) Decrease.
C) Remain unchanged.
D) Impossible to determine without more information.

Question

Quizplus · Accepted Answer

The dividend payout ratio is calculated by dividing the dividend per share by the earnings per share. In this case, the dividend per share remained unchanged, so the dividend payout ratio will remain unchanged.

The Market Price of XYZ Company's Common Shares Dropped from $25