Is there any correlation between ROE % of a share and dividend paid …as per my understanding
ROE = PAT /total equity
Now if the company pays dividend , will the ROE differ ?
hElLO tRaDeR,
Amount of Dividend paid and ROE are not directly correlated.
ROE is a industry standard benchmark.
Amount to be paid out as dividend is decided by the management based on many other factors. Cash liquidity of the company is one such example.
When the ROE increases along with cash reserves the management might decide to pay out higher dividends.