Impact of Dividend Increase on Payout Ratio

ABC Corp recently announced a dividend of $1.50 per share, which is a 20% increase from the previous year's dividend of $1.25 per share. The company's current share price is $30. Analysts are assessing the impact of this dividend increase on ABC Corp's financial ratios, particularly the dividend payout ratio and return on equity.

What is the likely impact of this dividend increase on the dividend payout ratio of ABC Corp, assuming that the net income remains constant?