The correct answer is C. Payout ratio.
The payout ratio is a measure of a company’s dividend policy. It is calculated by dividing the company’s annual dividend per share by its earnings per share. A high payout ratio indicates that a company is paying out a large portion of its earnings to shareholders in the form of dividends. A low payout ratio indicates that a company is retaining a larger portion of its earnings to reinvest in the business.
The other options are incorrect.
A. Proprietary ratio is a measure of a company’s financial leverage. It is calculated by dividing the company’s total assets by its total equity. A high proprietary ratio indicates that a company is using a lot of debt to finance its assets. A low proprietary ratio indicates that a company is using less debt to finance its assets.
B. Earnings-yield ratio is a measure of a company’s stock price relative to its earnings. It is calculated by dividing the company’s stock price by its earnings per share. A high earnings-yield ratio indicates that a company’s stock is relatively cheap. A low earnings-yield ratio indicates that a company’s stock is relatively expensive.
D. Retention ratio is a measure of a company’s dividend policy. It is calculated by dividing the company’s earnings per share by its dividends per share. A high retention ratio indicates that a company is retaining a large portion of its earnings to reinvest in the business. A low retention ratio indicates that a company is paying out a large portion of its earnings to shareholders in the form of dividends.