A company earns profit after tax of Rs. 800,000 and pays ordinary dividends of Rs. 200,000. What is its dividend payout ratio?
Correct answer: B. 25%
- A. 20%
- B. 25%
- C. 40%
- D. 75%
Explanation
The dividend payout ratio is ordinary dividends divided by profit after tax, multiplied by 100. Rs. 200,000 divided by Rs. 800,000 equals 25 percent.
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