Question

What is the plowback ratio for a firm that has earnings per share of $2.68 and pays out $1.75 per share in dividends

Answer 1

Answer:

34.70%

Explanation:

Calculation for the plowback ratio

Using this formula

Plowback ratio=(Earnings per share-Pays out per share)/Earnings per share

Let plug in the formula

Plowback ratio = ($2.68 - $1.75)/$2.68

Plowback ratio =$0.93/$2.68

Plowback ratio = .3470 ×100

Plowback ratio =34.70%

Therefore Plowback ratio will be 34.70%