alleryStart learning →A payout ratio above 100% shows the company did what that year?
AKept all its profit
BPaid out more than earned
CIssued bonus shares
DBought back shares
Answer & Solution
Correct answer: B. Paid out more than earned
Dividends exceeded earnings when the ratio is over one hundred percent.
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Related questions
Which limits can restrict how much a firm may distribute as dividend?Why might management avoid changing dividend policy abruptly?Which alternative to cash dividends may a firm choose when surplus cash exists?Which type of shareholder usually prefers earnings to be retained?With no NPV-positive projects and surplus cash, what should management do?Management knowing more than the market is called what?If dividends bear higher tax than gains, raising them does what to value?Per the Modigliani-Miller theorem, dividend policy has what effect on firm value?