Payout Decision and Working Capital

This question provides an opportunity to get some hands-on experienceapplying corporate finance theory and models to real firms. In the process,students will get a chance to analyse a companyscorporate payout policy toits shareholders and thereby concludewhich policy(cash dividends or sharerepurchases)the company had applied.Choose three companies from the same industry of the FTSE 100 companiesfrom London Stock Exchange.

Required:

a)Analyse thecorporate payout policy to shareholders for eachofthe threecompaniesfor the financial year 2010-11, 2011-12 and 2012-13.

b)Critically evaluate the strategy applied for financingthe payoutfor eachof thethree companiesovertimei.e. is it from retained earnings, excesscash, or financedthrough debt.

c)In your opinion, which company has themost effective and efficientpayout policyin last three observed years?Provide your arguments andsupport them with theory and articles fromfewfinance journals.

d)Critically discuss if the payout policy observed by all the three firmsabove is anoutcomeof an efficient working capital managementso as to reward the shareholders or merely asubstitutionof apoor working capital management and thereforepayout is a tool to

misguide the shareholders. You have to discuss the two aspects in veinwith the outcome and substitution hypothesis of payout policy discussedin La Porta et al., 2000.Agency problems and dividend policies aroundthe world. Journal of Finance55, 1-33.

I would kindly appreciate if someone can help me with above assignment. Thanks in advance.