A company's payout ratio is calculated as the amount of dividends paid divided by the firm's...

A company's payout ratio is calculated as the amount of dividends paid divided by the firm's net income.

T or F

Solutions

Expert Solution

TRUE

Payout ratio is the proportion of net income distributed to shareholders as dividend.

Hope it will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

A sensible payout policy: A. sets dividends at a level just equal to the amount of...

A sensible payout policy: A. sets dividends at a level just equal to the amount of new equity that can be raised annually. B. sets dividends based on net income, not cash flows. C. consistently varies its target payout ratio on an annual basis. D. pays out all free cash flows over time. E. cuts positive NPV investments, if needed, to steadily increase its dividend.

A company just started to pay dividends. Its dividend payout ratio is 30%. An analyst expected...

A company just started to pay dividends. Its dividend payout ratio is 30%. An analyst expected the company growing fast at the following first two years at a dividend growth rate of 10% per year. After that the company will slow down to an annual growth rate of 5% forever. The company’s required rate of return is 8% per annual. If the company’s last annual earning is $10 per share, what’s the stock price the analyst should expect now? A...

Labels and Amount Descriptions Cash paid for dividends Cash paid for purchase of equipment Cash paid...

Labels and Amount Descriptions Cash paid for dividends Cash paid for purchase of equipment Cash paid for purchase of land Cash paid for purchase of treasury stock Cash payments for income taxes Cash payments for merchandise Cash payments for operating expenses Cash received from customers Cash received from sale of common stock Cash received from sale of investments Change in cash December 31, 20Y6 Depreciation For the Year Ended December 31, 20Y6 Gain on sale of investments Issuance of common...

Stock price = $40, dividend paid =$2, EPS = $4, so : A. dividend payout ratio...

Stock price = $40, dividend paid =$2, EPS = $4, so : A. dividend payout ratio =5% b dividend yield =5% c. dividend yield =50% d. P-E=20 e None of the above

As u know.today’s stock price is 39,the dividend is 1.2,payout ratio is 60,trailing 12M dividends per...

As u know.today’s stock price is 39,the dividend is 1.2,payout ratio is 60,trailing 12M dividends per share is 1.4,next year the dividend is 1.55,payout ratio is 60.2 calculate the trailing P/E ratio and Forward P/E ratio.before you calculation?brifely explain the difference between the two kinds of P/E ratio.and u know the average industry average P/E ratio is 25,please compare this P/E ratio ,what conclusion u can get?

1.A firm's current ratio is below the industry average; however, the firm's quick ratio is above...

1.A firm's current ratio is below the industry average; however, the firm's quick ratio is above the industry average. These ratios suggest that the firm A. has relatively more total current assets and even more inventory than other firms in the industry B. has liquidity that is superior to the average firm in the industry C. has relatively less total current assets and less inventory than other firms in the industry D. is near technical insolvency E. is very efficient...

Magnolia Company's most recent dividend paid was $0.50, the expected growth rate for future dividends is...

Magnolia Company's most recent dividend paid was $0.50, the expected growth rate for future dividends is 2%. The firm’s stock currently has a beta of 1.50 If the expected return is 8% for the market and 3% for a 3-month T-bill, what is the price of Magnolia’s common stock, assuming the growth rate will continue forever? a. $6.00 b. $3.92 c. $6.67 d. $3.85 e. $5.10

What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds?

Current and Quick RatiosThe Nelson Company has $1,209,000 in current assets and $465,000 in current liabilities. Its initial inventory level is $315,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0? Do not round intermediate calculations. Round your answer to the nearest dollar.$ What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term...

What is the payout policy of a company who is paying no dividends for the last...

What is the payout policy of a company who is paying no dividends for the last 5 years and the companies diluted earnings per share for last 5 years is also zero or negative. We need to determine payout policy only on the basis of the payout ratio, so how can we describe the payout policy when there is no dividend, no diluted earning per share?

In order to determine _____, the firm's total cost must be divided by the quantity of...

In order to determine _____, the firm's total cost must be divided by the quantity of its output. A) fixed cost B) average cost C) diminishing marginal returns D)variable cost

Subjects