BHP Group Limited is an Australian conglomerate that engages in the exploration,

development, and processing of iron ore, coal, and copper. Iron ore prices have plunged from

$220 per ton in 2021 to just over $100 per ton in December 2021. Iron ore exports are one

of the fundamental components of the company's revenue. Yet, BHP has just announced

their intention to increase their dividend for 2021.

Required

(i)

What might have motivated BHP to increase their dividend? What are the implications

of BHP's announcement for financial markets? (10 marks)

(li)

BHP board approved the establishment of a Dividend Reinvestment Plan (DRP) for

the final implementation for the final dividend in the 2018 financial year. What are some

of the major reasons BHP may have wished to establish a DRP? What benefits, if

there are any, would a DRP offer to ordinary shareholders? (10 marks)

(ili)

Based on the past years of dividend payment history, how would you describe the

BHP's dividend policy? Is the current dividend policy justified? Why or why not?

Discuss the factors which in your opinion underlie the dividend policy of the

company. If you were to advise the management about the dividend policy for FY

2022, what would you recommend? (10 marks)

(iv)

Critically evaluate BHP's financial and non-financial risks including ESG

(Environmental, Social and Governance) and the way BHP managed those risks in

the past five years. (20 marks)