Definition: What is a Dividend Payout Ratio?
Dividend Payout Ratio measures the percentage of the net income which is distributed to the shareholder in dividend form during the year.
This ratio shows that which proportion of profit company keep funding the operation and which proportion of profit company give to the shareholders of the company.
Investors give importance and use the Dividend payout ratio to calculate that the companies paying the reasonable portion of the net income to investors or not.
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