G has 31 December as its financial year end. Financial data for the last 3 years is given below: Year to 31 December: Dividend Profit/(loss) after tax Depreciation included in profit/(loss) On-going capital expenditure Data as at 31 December: Long term borrowings Share price Additional information: 2017 2018 2019 USD million USD million USD million 120 160 170 300 300 (100) 100 100 120 160 700 300 USD 2,000 million USD 1,820 million USD 2,090 million USD 4.00 USD 3.50 USD 3.00 On 1 January 2017, GNU had 600 million USD 1 shares in issue. On 1 January 2018, there was a "1 for 3" rights issue at an issue price of USD 3.20 per share. There were no other changes to share capital in the 3 year period shown above. Assume that depreciation is the only non-cash item included in profit/(loss) after tax above. Over two-thirds of the shares are held by large financial institutions such as pension funds, insurance companies and investment vehicles. The remaining shares are held by directors of the company and private individuals. Required: (a) (i) Analyse GNU's dividend policy in the years 2017, 2018 and 2019 based on the data provided. Support your answer with calculations of: Dividend cover based on profit/(loss) after tax. Dividend per share. Free cash flow generated in the year (before dividend payments). Up to 6 marks are available for calculations [7] (ii) Advise GNU on the benefits and drawbacks of the current dividend policy AND possible alternative policies. [9] (b) Discuss the interrelationship between financing decisions and, investment and dividend decisions. Illustrate your answer with reference to GNU. [9]