Dividend payout ratio
The dividend payout ratio is the fraction of net income a firm pays to its stockholders in dividends: Dividend payout ratio = Dividends Net Income for the same period {\textstyle {\mbox{Dividend payout ratio}}={\frac {\mbox{Dividends}}{\mbox{Net Income for the same period}}}} The part of earnings not paid to investors is left for investment to provide for future earnings growth. Investors seeking high current income and limited capital growth prefer companies with a high dividend payout ratio.