LMT is a company that has been listed on the London Stock Exchange since 2010. Institutional investors own approximately 45 per cent of the ordinary shares of the company. The recent financial performance of the company is shown below. Using the information provided, comment on the dividend policy of LMT and critically discuss whether this dividend policy is likely to be acceptable to its institutional investors.

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Year 2015 2014 3.1 33.0 11.1 3.4 2013 2012 2011 2010 Turnover (E million) Earnings per share (pence) Dividend per share (pence) Annual inflation (%) 3.3 34.2 11.4 2.7 29.2 9.9 3.1 2.6 28.6 9.6 2.4 2.5 27.6 9.2 3.4 2.0 25.4 8.5 2.5