What do you mean by dividend cover, Strategic Management

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Q. What do you mean by Dividend cover?

Dividend cover 

Dividend cover   =   Profit available to ordinary shareholders (PAT) / Annual dividend (no. of times)

Or = EPS/Dividend per share

Dividend cover shows the safety of the dividend payments.  How many times can company pay the current level of dividends out of the profits currently being earned?


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