NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Investing in Stocks (NISM XXI-A)
A company with 10 crore shares outstanding has a net profit of ₹150 crore, and pays total dividends of ₹45 crore. What is its dividend payout ratio and dividend per share?
The payout ratio is 30% and dividend per share is ₹4.5. Dividends of ₹45 crore are 30% of the ₹150 crore profit, and dividing ₹45 crore by 10 crore shares gives ₹4.5 per share.
- A25% payout; ₹4.5 per share
- B30% payout; ₹4.5 per shareCorrect
- C30% payout; ₹15 per share
- D70% payout; ₹4.5 per share
Explanation
Payout ratio = 45/150 = 30%. DPS = 45 crore / 10 crore shares = ₹4.5. Option with 70% is the retention ratio (1 - 0.30). The ₹15 figure is EPS (150/10), not DPS.
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