Learning Videos

What is Stock Exchange?

How Stock Exchange is managed in Pakistan?

Why do stock prices fluctuate?

Random Financial Term

Dividend Payout Ratio

What you Need ?

Income Statement

Dividend Payout Ratio = Dividend / Net Income

The percentage of profits distributed as a dividend is called the dividend payout ratio. Some companies maintain a steady payout ratio, while other try to maintain a steady number of dollars paid out each year (which means the payout ratio will fluctuate). Each company sets its own dividend policy according to what it thinks is in the best interest of its shareholders. Income investors should keep an especially close eye on changes in dividend policy.

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