You work for a consulting firm that provides advice to companies regarding dividend policy. Your client is large manufacturing firm. It currently has a dividend yield of 3.2%. At its board of directors meeting on Friday, the client's CEO must recommend whether or not to increase the dividend.

How would the information contained in the article (on the next page) affect the advice you would provide to the client regarding a change in its dividend?

A Shipping Bellwether Drops to Record Low BY DAVID HODARI minus 21 points to a record low of minus 102 on Monday, a A bellwether of the global Baltic Exchange spokesperson shipping market has hit a low said. The broader Baltic Dry as the spread of the coronavi- Index, which tracks global rus weighs on global trade. shipping rates, fell to 466 on The fast.spreading virus Monday, its lowest level in and uncertainty around its im- four years. pact on the world's economy The recent drop in freight have rocked markets and sent rates also comes as a conse- commodities prices to multi- quence of a slowdown in month lows in recent days. China's domestic logistics. That has added pressure to "The coronavirus has com- shipping freight rates--the plicated matters, reduced price at which cargo is deliv- workforces at ports, and ex- ered from one point to an- tended the New Year holiday other-for the world's largest in some major steel-producing raw materials ships, known as areas," said Derek Langston, capesize vessels. head of research at shipbroker The Baltic Exchange's cape- SSY. The outbreak adds to size index, which constitutes other issues plaguing freight part of the Baltic Dry Index- rates of the world's largest an important proxy for the ships, with reduced iron-ore world's shipping market-ex. flows from Brazil to China af- tended deeper into negative ter last year's Brumadinho territory Monday, after slip- tailings dam disaster pressur- ping below zero for the first ing freight demand, Mr. Langs- time ever on Friday. ton said. "The coronavirus is defi- Analysts and brokers also nitely having an impact," said point to regulation changes one London-based ship broker. and weather. "A perfect storm "We work in an environment has brewed for the cape mar- where everything is just in ket and prices in 2020 so far," time and it can have a knock- said Shruti Bansal, product on effect pretty quickly once manager at cargo-tracking ser- the wheels of the world stop vice Kpler. turning." The first quarter is typically Capesize vessels move quiet for freight activity, but products such as iron ore and poor weather, higher-than- coal from mines in Latin normal bunker fuel prices and America and Australia to Eu- the coronavirus outbreak have rope and China. The index combined to make the situa- tracking them plunged from tion worse, she added. Underwater Baltic Exchange's index for the largest ships that move bulk commodities has fallen into negative territory. Baltic Capesize Index 4000 3000 2000 2000 17 2015 Source: Baltic Exchange 18 19 78 A Shipping Bellwether Drops to Record Low BY DAVID HODARI minus 21 points to a record low of minus 102 on Monday, a A bellwether of the global Baltic Exchange spokesperson shipping market has hit a low said. The broader Baltic Dry as the spread of the coronavi- Index, which tracks global rus weighs on global trade. shipping rates, fell to 466 on The fast.spreading virus Monday, its lowest level in and uncertainty around its im- four years. pact on the world's economy The recent drop in freight have rocked markets and sent rates also comes as a conse- commodities prices to multi- quence of a slowdown in month lows in recent days. China's domestic logistics. That has added pressure to "The coronavirus has com- shipping freight rates--the plicated matters, reduced price at which cargo is deliv- workforces at ports, and ex- ered from one point to an- tended the New Year holiday other-for the world's largest in some major steel-producing raw materials ships, known as areas," said Derek Langston, capesize vessels. head of research at shipbroker The Baltic Exchange's cape- SSY. The outbreak adds to size index, which constitutes other issues plaguing freight part of the Baltic Dry Index- rates of the world's largest an important proxy for the ships, with reduced iron-ore world's shipping market-ex. flows from Brazil to China af- tended deeper into negative ter last year's Brumadinho territory Monday, after slip- tailings dam disaster pressur- ping below zero for the first ing freight demand, Mr. Langs- time ever on Friday. ton said. "The coronavirus is defi- Analysts and brokers also nitely having an impact," said point to regulation changes one London-based ship broker. and weather. "A perfect storm "We work in an environment has brewed for the cape mar- where everything is just in ket and prices in 2020 so far," time and it can have a knock- said Shruti Bansal, product on effect pretty quickly once manager at cargo-tracking ser- the wheels of the world stop vice Kpler. turning." The first quarter is typically Capesize vessels move quiet for freight activity, but products such as iron ore and poor weather, higher-than- coal from mines in Latin normal bunker fuel prices and America and Australia to Eu- the coronavirus outbreak have rope and China. The index combined to make the situa- tracking them plunged from tion worse, she added. Underwater Baltic Exchange's index for the largest ships that move bulk commodities has fallen into negative territory. Baltic Capesize Index 4000 3000 2000 2000 17 2015 Source: Baltic Exchange 18 19 78