Dividend Coverage Ratio
This ratio measures the adequacy of profits to cover the dividends. This ratio safeguards the preference shareholders dividend incomes. The formula is,
Dividend Coverage Ratio (for preference shareholders)
Dividend Coverage Ratio (for equity shareholders)
This ratio indicates the profits available to equity shareholders. The dividend coverage ratio reflects the dividend policy of company. A high cover indicates that the company operates a conservative dividend policy and does not distribute large portion to equity interest.
From the following information calculate the cover for preference and equity dividend.
|
Rs.
|
Capital: 7% preference shares of Rs.100 each
|
3,00,000
|
Equity shares of Rs.10 each
|
8,00,000
|
Profit after tax
|
2,71,000
|
Equity dividend rate
|
20%
|
Email based Accounting assignment help - homework help at Expertsmind
Are you searching Accounting expert for help with Dividend Coverage Ratio questions? Dividend Coverage Ratio topic is not easier to learn without external help? We at www.expertsmind.com offer finest service of Accounting assignment help and Accounting homework help. Live tutors are available for 24x7 hours helping students in their Dividend Coverage Ratio related problems. We provide step by step Dividend Coverage Ratio question's answers with 100% plagiarism free content. We prepare quality content and notes for Dividend Coverage Ratio topic under Accounting theory and study material. These are avail for subscribed users and they can get advantages anytime.
Why Expertsmind for assignment help
- Higher degree holder and experienced experts network
- Punctuality and responsibility of work
- Quality solution with 100% plagiarism free answers
- Time on Delivery
- Privacy of information and details
- Excellence in solving Accounting questions in excels and word format.
- Best tutoring assistance 24x7 hours