Terms Beginning With 'd'

Dividend Coverage Ratio

  • January 15, 2020
  • Team Kalkine

The financial metric, Dividend Cover or Dividend Coverage Ratio calculates the number of times that a firm is able to pay dividends to its equity holders. It is an inverse of dividend payout ratio, which is calculated by dividing annual dividend per share to the EPS (earnings per share). Dividend Coverage Ratio enables investors to assess the safety of the firm’s dividend.

Dividend coverage ratio = Net income / Dividend paid to shareholders

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