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You are evaluating the dividend distribution policies of two utility companies, PowerGrid and ElectricX, to assess their commitment to shareholders. Requirements: PowerGrid paid dividends of

You are evaluating the dividend distribution policies of two utility companies, PowerGrid and ElectricX, to assess their commitment to shareholders.

Requirements:

  1. PowerGrid paid dividends of $40 million and reported a net income of $100 million for the fiscal year 2023. ElectricX paid dividends of $50 million and had a net income of $120 million during the same period.
  2. Calculate the dividend payout ratio for both companies.
  3. Determine which company distributes a higher proportion of its earnings as dividends.

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