Financial Ratios – Dividend Policy Ratios
These ratios give an insight into the dividend policy of a company.
Dividend Yield = Dividend per share / market value of the share
This ratio doesn’t show the future growth.
Payout ratio = Dividend per Share / Earnings per share
Price Earnings ratio (P/E ratio):
This ratio comes under valuation ratios as this is useful in assessing the value of a share.
Price earnings ratio = Market value of a share / Earnings per share
This is a very important factor people consider while investing in share market. It gives a picture of historical performance, risk characteristics, liquidity and shareholder orientation.
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May 31, 2009 | Filed Under Fundamental Analysis
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