The dividend pay-out ratio represents:
A) the proportion of the current period's profits that are distributed to shareholders.
B) the amount of dividends that have been paid as a proportion of the number of shares issued.
C) the earnings available to be paid out per share.
D) the amount of dividends paid out as a proportion of the operating cash flows.

Question

Quizplus · Accepted Answer

The dividend pay-out ratio is calculated by dividing the dividends paid out by the net income that remains after all expenses, including taxes, have been paid. Therefore, it represents the proportion of the current period's profits that are distributed to shareholders.

The Dividend Pay-Out Ratio Represents