What should be the optimum dividend payout ratio when n=14% and n = 17%?
a. Irrelevant
b. Zero
C. 50%
d. 100%
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Answer:
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Answered by
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The correct option is "a"
For calculation of dividend payout ratio we need the dividend paid and net income but in the question there are no dividend paid and no net income given so we can not calculate the optimum payout ratio.
Dividend payout ratio = DP/NI
where:
DP=Dividends paid
NI=Net income
Hence the question is irrelevant.
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