The January 25, 2005, edition of the Wall Street Journal has an article by Mary Kissel

(on p. C1) entitled “Known for Growth, Asian Firms Answer Call of the Dividend.”

Instructions Read the article and answer the following questions.

(a) What is the “dividend yield”? How does the dividend yield of Asian companies compare to that of companies in other regions?

(b) What has happened to Asian company debt levels in recent years? What implications has this had for return on equity? Explain why this would be the case.

(c) What measure is used to determine whether a company is paying out a high percentage of its earnings in the form of dividends? What percentage of their earnings are Asian firms paying out? According to the article, how have the stock prices of dividend-paying companies performed relative to non-dividend-paying companies? What explanations are given for this?

INTERNATIONAL FINANCIAL REPORTING PROBLEM: Zetar plc