Dividend cover ratio, Finance Basics

Dividend Cover Ratio

Dividend cover = EPS/ DPS = Earning to ordinary shares/Dividend paid      

  1. This signifies the number of times dividend can be paid from earnings to ordinary shareholders. The higher the DPS the lower the dividend cover and vice-versa as consider the following two firms X and Y

 

 X

Y

EPS

DPS

Dividend Corner                

12

3

12/3 = 4

12

4

12/4 = 2.4 times

Posted Date: 1/30/2013 2:17:57 AM | Location : United States







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