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Sir my kaplan study text defines this as “paying out a constant proportion of equity earnings”
what does equity earnings mean here? FCF to equity? or profit after interest and tax?
Equity earnings is the profit available for shareholders i.e. the profit after interest and tax.
sir can we say that advantage of constant dividend payout is that significant management time is saved because they will know how much dividend is to repaid, instead of thinking of appropriate dividend payout each year.
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