a) Calculate EasyJets dividend payout ratios: one payout ratio based on its net income and one based on its free cash flow available for shareholders (i.e. its free cash flow to equity, FCFE) for the financial year ended 2015.

b) Comment on EasyJets dividend policy and explain why it may have chosen its dividend history based on the theories identified in part (a) and your results from part (b). Based on your analysis, would you recommend that EasyJet returned more cash or less cash to its shareholders for its fiscal years ended 2016 and 2017?

EasyJet plc dividend history

Financial year end	Type	Amount	Ex-dividend date	Payment date
30/09/2015	Total	55.20p
	Final	55.20p	25/02/2016	18/03/2016
	Special	n/a	n/a	n/a
30/09/2014	Total	45.40p
	Final	45.40p	26/02/2015	20/03/2015
	Special	n/a	n/a	n/a
30/09/2013	Total	77.60p
	Final	33.50p	26/02/2014	21/03/2014
	Special	44.10p	26/02/2014	21/03/2014
30/09/2012	Total	21.50p
	Final	21.50p	27/02/2013	22/03/2013
	Special	n/a	n/a	n/a
30/09/2011	Total	45.40p
	Final	10.50p	29/02/2012	23/03/2012
	Special	34.90p	05/03/2012	23/03/2012

Historical dividends may be adjusted to reflect any subsequent rights issues and corporate actions.

Strong financial performance FY 2015 FY 2014 Change Change m m (a CC 4,686 4,527 Total revenue 6.59% 3.5% 4.2% 4.69% Fuel (1,199) (1,251) Costs excluding fuel (2,801) (2,695) (3.9%) (8.7%) 18.19% 20.2% 686 Profit before tax 581 12.89% 1.8ppt 14.6% Profit before tax margin 14.19% 823 EBITDAR 940 16.79% 20.0% EBITDAR margin 18.2% 1.8 ppt 139.1 Earnings per share 114.5 21.5% 21.6% Dividend per share 55.2 45.4 Return on capital employed 22.2% 20.5% 1.7 ppt