Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Your answer has nothing to do with the question, if I want general questions like this, I would go to google! 1. Choose a company

Your answer has nothing to do with the question, if I want general questions like this, I would go to google!

1. Choose a company from the given sectors: a company from the provided sectors, ensuring it is listed as a large-cap (market cap between $10 billion and $200 billion) and publicly listed. 2. Comment on the existing dividend policy: the company's annual financial statement of 2022 and research its dividend policy to assess whether the company pays regular dividends historically. a. Impact of a one-time special dividend on stock price and shareholder value: It depends on various factors, including market conditions, investor sentiment, and the company's financial position. It is recommended to perform calculations based on the company's market value and balance sheet of 2022 to assess the potential impact accurately b. Impact of using the money to pay off debt on company value: Using the money to pay off debt can positively impact the company's value by improving its financial stability, reducing interest expenses, and enhancing its credit rating. Explanation: please refer to solution in this step c. Impact of share repurchases on P/E, ROA, ROE, and company value: Share repurchases can affect various financial metrics such as the price-to-earnings ratio (P/E), return on assets (ROA), return on equity (ROE), and company value. Analyze the company's market value and balance sheet of 2022 to assess the specific impact on these metrics and overall company value. d. Evaluation of a permanent change in dividend policy based on profits: Assess the feasibility and implications of making a permanent change in the dividend policy based on profits. Consider factors such as earnings stability, growth prospects, cash flow requirements, and shareholder expectations. e. Final comments on the existing dividend policy: Summarize the strengths, weaknesses, and potential areas for improvement in the dividend policy, taking into account the company's financial position, market conditions, and shareholder preferences Please choose a non tech company and include all calculations This assignment is based on dividend Policy being used by different companies in the corporate world. The below exercise will provide an insight in the dividend policies being followed by companies. 1. Choose a company from the below list of sector/industry in the stock market. Make sure the company is listed under Large- cap (a stock with a market cap between $10 billion and $200 billion). Make sure to pick a Publicly Listed Company only as they need to declare their financial statements ( 2 Marks) a. Financials b. Utilities c. Consumer Discretionary d. Consumer Staples e. Energy f. Healthcare g. Industrials h. Technology i. Telecom j. Materials k. Real Estate 2. Lets assume this company is expecting to earn a profit of $30 million and you are required to make decisions. Download the Annual Financial Statement of 2022 and research the Dividend Policy(If the company pays regular dividends historically) before answering.. Comment on the existing dividend policy. (3 Marks) a. The company uses the money to pay off a one-time special dividend. Keeping in mind the Modigliani and Miller approach how will this decision affect the stock price and the shareholder value. (Use calculations of Market Value and Balance Sheet of 2022 to justify the rationale) 5 Marks b. The company uses the money to pay off the debt. How would that affect the value of company? (Use calculations of Market Value and Balance Sheet of 2022 to justify the rationale) 5 marks c. If the company uses this money to repurchase shares how would that affect the P/E, ROA and ROE? How will the value of company value be affected by share-repurchase? (Use calculations of Market Value and Balance Sheet of 2022 to justify the rationale) 10 Marks d. If the company decides to make a permanent change in dividend policy based on the profits would that be a good idea? 5 Marks e. Based on the above analysis what are your final comments about the existing dividend policy of the Company. 5 Marks

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

Financial Issues In Emerging Economies

Authors: Rita Biswas , Michael Michaelides

1st Edition

183867960X, 1838679618, 9781838679606, 9781838679613

More Books

Students also viewed these Finance questions