Dividend Payout Ratio

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The Dividend Payout Ratio, often referred to in the context of the payout ratio definition, is a financial metric that measures the proportion of a company’s earnings distributed to shareholders as dividends. It is calculated by dividing the total dividends paid by the net income. This ratio provides insight into a company’s dividend policy and its ability to sustain dividend payments. A higher ratio may indicate a mature company with stable earnings.

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