Feasible target payout ratios

Feasible target payout ratios

Payout ratios that are consistent with the level of excess funds available to make cash dividend payments.

Feasible Target Payout Ratio

The payout ratio (or what a company pays in dividends as a percentage of its earnings) that it can afford based on its free cash flow. Maintaining feasible target payout ratios helps ensure that a company does not pay more than it can afford in dividends.