Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Origin Energy has just announced its profits for 2021. It has been a good year, with the firm having earned a 25.0% return on the

image text in transcribed

Origin Energy has just announced its profits for 2021. It has been a good year, with the firm having earned a 25.0% return on the retained profits that it invested in new projects. It tells investors that it will shortly be paying out 25.0% of these earnings to them through a cash dividend of $56.2 per share. Anticipating the investors might be unhappy with such a sharp drop from the 86.6% of its profits that they returned to investors in 2020, the firm explains that this decrease is due to it currently having significantly more profitable investment opportunities as this time. A combination of lighter government regulation and subsidies for renewable energy market investment have given an unforeseen boost to their sector. Origin Energy believes that this coming year it will be able to increase its profitability even further. A combination of the continued impact of the previously mentioned factors with further economic stimulus from the government will see its return on new investments increase to 28.2%. Complete the following statements using the information above: (a) Origin Energy paid a $ dividend per share to its shareholders in 2020. (Round your answer to the nearest cent) (Use the unrounded value of this answer in any subsequent questions that require it) (No answer given) by % compared to the dividend they received in 2020. (b) The dividend the investors receive from Origin Energy this year will have (Round your answer to 2 decimal places)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Foundations Of Personal Finance

Authors: Sally R. Campbell, Robert L. Dansby

9th Edition

1619603578, 9781619603578

More Books

Students also viewed these Finance questions