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Thursday, August 11, 2011

How to Calculate Dividend Cover Ratio

Dividend Cover Ratio is the ratio of company's earnings over the dividend paid to shareholders. It is the inverse of the Dividend Payout Ratio. The lower the dividend cover, the higher the percentage of total earnings paid out as dividends to shareholders.

Learn how to calculate the dividend coverage ratio with the following examples:

Example 1:
PPC Company makes a net profit of $200,000 and


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