The earnings per share and the dividend per share of Uppen Down plc for the last few years are shown below (in pence):

a You are required to calculate the dividend cover for each year;
the proportion of profits that was distributed as dividends; and the dividend yield based on the share price at the year end given above.
b Comment on the company’s dividend policy.
c Since the end of year 7 the dividend yield, as shown in the Financial Times, has increased to 10 per cent. What is this likely to indicate?

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Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 EPS 20 25 18 30 10 13 24 Div 10 10.4 10.8 11.2 11.7 12.2 12.7 Share price 300 400 200 270 250 270 300