Q1. What is Dividend PayOut Ratio? Answer: A company generally distributes a certain portion of its net income to its shareholders as a dividend. Such percentage of the dividend distribution out of the current earning is known as Dividend Payout Ratio. The remaining percentage of the earning is retained by the company as reserves and surplus. It is called retention ratio. Dividend payout ratio and retention ratio are like the two-wheel of a chariot. Both of them are part of the earning of the company. Their relationships can be better expressed by the following equation: Dividend Payout Ratio + Retention Ratio = 1 or 100% (i.e. Total earning) For Example, A company named XYZ Ltd has current year earning ( i.e. Net income) of $ 250,000. It distributes $50,000 in the form of dividends. The remaining $200,000 is retained as a reserve and surplus. Now the Dividend Payout Ratio is 0.2 and Retention ratio is 0.8. The sum of them both is equal to 1 (i.e total earning)...