The Dividend Payout Ratio Describes

question 40

Multiple Choice

The dividend payout ratio describes:

• A)the proportion of earnings paid as dividends.
• B)the relationship of dividends per share to market price per share.
• C)the percentage change in dividends this year compared to last year.
• D)dividends as a percentage of the price/earnings ratio.

---

Definitions:

Double-Declining Balance Method

The Double-Declining Balance Method is an accelerated depreciation technique that doubles the rate of straight-line depreciation to allocate a asset's cost more quickly.

Activity Method

A depreciation technique that allocates the cost of an asset over its useful life based on its level of activity, such as units produced or hours used.

Sum-Of-The-Years'-Digits Method

A depreciation technique that accelerates the expense recognition, basing the calculation on a fraction of the sum of the years’ digits of the asset’s life.

Inventory System

A method used by organizations to maintain and manage the goods or materials that they stock, either for sale or for production purposes.