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Dividend Payout Ratio | Definition, Formula, Importance, & Pros

Dividend Payout Ratio | Definition, Formula, Importance, & Pros

The dividend payout ratio is the ratio of total dividends relative to total net income, stated as a percentage. A company may either decide to reinvest its earnings back into the business, or pay out its earnings to shareholders—the dividend payout ratio is what percent of earnings is paid out to shareholders as a dividend.

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Dividend Payout Ratio Definition, Formula, and Calculation

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