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Saturday, April 23, 2011

Dividend Payout Ratio Formula & Example

Definition: Dividend Payout Ratio (DPR) is used to measure the extent to which earnings per share have been used for paying dividends to stockholders. A low payout ratio can indicate that a company’s dividend is small compared to its earnings.

Formula:
Dividend Payout Ratio = Dividend per Share / Earnings per Share

Example 1:
TTC Company paid out $2.10 per share in annual dividends and had

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