Question 2: (7 Marks) Saudi firms distribute almost 100% of their profits in dividends which led the Capital Market Authority to issue a circular (number 12/2003) arguing that firms should retain some of their earnings for "rainy days (Osman and Mohamed, 2010, p.100). Sometimes companies issue debts to pay dividends. What is dividend policy and explain Gordon and M&M views on dividends? Is this the case in Saudi Aramco? The company made a profit of almost $50 billion. What is your comments on the following graph and is leverage ratio increased/decreased in Aramco? Rising But Still Low Aramco's net income had fallen for four straight quaters Aramco's quarterly net profit $ 30b 20 Bloomberg 10 O Q2 Q3 Q4 Q2 Q3 Q2 03 04 Q1 2019 Source: Bloomberg, Saudi Aramco Q1 2020 2018 Bloomberg Question 2: (7 Marks) Saudi firms distribute almost 100% of their profits in dividends which led the Capital Market Authority to issue a circular (number 12/2003) arguing that firms should retain some of their earnings for "rainy days (Osman and Mohamed, 2010, p.100). Sometimes companies issue debts to pay dividends. What is dividend policy and explain Gordon and M&M views on dividends? Is this the case in Saudi Aramco? The company made a profit of almost $50 billion. What is your comments on the following graph and is leverage ratio increased/decreased in Aramco? Rising But Still Low Aramco's net income had fallen for four straight quaters Aramco's quarterly net profit $ 30b 20 Bloomberg 10 O Q2 Q3 Q4 Q2 Q3 Q2 03 04 Q1 2019 Source: Bloomberg, Saudi Aramco Q1 2020 2018 Bloomberg