Wize University Introduction to Financial Accounting Textbook > Shareholders' Equity
Dividend Payout Ratio
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Dividend Payout Ratio
The dividend payout ratio is the percentage of the company's profits that is paid out in dividends.
About the Ratio
- Low ratio indicates that profits are primarily reinvested for growth
- Newer companies
- Companies expected accelerated growth
- High ratio indicates that profits are being given to shareholders.
- Established companies
- Companies not expected to grow at an accelerated page
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Example: Dividend Payout Ratio
In 2019, Apple Inc. reported EPS of $11.97 and paid $3.08 in dividends. The current market price of the stock is $364.11.
What is the company's payout ratio?
Practice: Dividend Payout Ratio
Bank of Wize paid quarterly dividends of $0.77 to shareholders in 2020. The company reported net earnings of $124 million and had an average of 10 million shares outstanding.
What is the company's dividend payout ratio?
Do not round your work, round final answer to 2 decimal places. Enter your final answer in percentage format. For example, 0.27866 should be entered as 27.87