Question
Woolworths Group Limited, a major Australian company, has extensive retail interests throughout Australia and New Zealand. It is the largest company in Australia by revenue
Woolworths Group Limited, a major Australian company, has extensive retail interests throughout Australia and New Zealand. It is the largest company in Australia by revenue and the second-largest in New Zealand.
According to the company disclosure, Woolworths Group has a Debt to Equity of 1.86%. This is 97.65% lower than that of the Consumer Defensive sector and 98.84% lower than that of the Grocery Stores industry. The debt to equity for all Australia stocks is 96.18% higher than that of the company. The financial results of the company shows impressive growth over the last three years with the companys liquid cash or near cash balance (i.e. marketable securities) and equity growth through retained earnings showing impressive strength despite a commitment to regular dividend payments.
QUESTION
- Explain how higher dividends could alleviate some of the agency problems for the Woolworths Group.
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Principles Of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter
13th Edition
9780132738729, 136119468, 132738724, 978-0136119463
