Insert the information in the form and the calculator will determine the dividend payout ratio.

What is the dividend payout ratio?

The dividend payout ratio is the part of a company's net income that is payed as dividends for common and preffered shareholdrs. Usually the higher dividend payout ratio attracts more investors to the stock and it is often expressed as a percentage

How to calculate dividend payout ratio?

To calculate dividend payout ratio you should use the following formula:
dividend payout ratio = (dividends / net income) * 100

example: Company x issued $3,100,000 in dividneds in the current year with $14,500,000 in net income, calculate the payout ratio?

Using the dividend payout ratio formula the asnwer will be:

dividend payout ratio = (dividends / net income) * 100
dividend payout ratio = ($3,100,000 / $14,500,000) * 100
dividend payout ratio = 21.38%

Why use dividend payout ratio?

Investors use the dividend payout ratio because it helps them to indicate how much money a company is returning to shareholders against how much it is keeping to reinvest in growth, pay debt or add to cash reserves.