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 in dividends, while a low payout ratio indicates that a company is retaining a larger portion of its earnings.
The payout ratio is an important metric for investors to consider when evaluating a company’s stock. A high payout ratio can be a sign of a healthy company with a strong track record of profitability. However, it can also be a sign that a company is not investing enough in its future growth. A low payout ratio can be a sign of a company that is reinvesting heavily in its business, but it can also be a sign that a company is struggling to generate profits.
The other options are incorrect for the following reasons:
- 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.
- B. Earnings-yield ratio is a measure of a company’s earnings yield. It is calculated by dividing the company’s earnings per share by its stock price.
- 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.