Question: Embro Inc is a Canadian publicly traded company A friend

Embro Inc. is a Canadian publicly traded company. A friend of yours has been watching the stock for some time and feels that now would be a good time to buy. The friend said the company has paid a $1 dividend for the last four years and so provides a steady source of cash that she needs. She wants to go ahead with the purchase but she first wants your opinion on the status of the company. You have the following information about Embro:

a. Calculate Embro's dividend payout ratio and the dividend yield. Assume that the number of shares outstanding during the period didn't change and calculate the dividend payout ratio on a per share basis (dividends per share? EPS.) Write an email to your friend explaining, based on the information you have, whether she should go ahead and purchase Embro shares. Explain your reasoning.
b. What additional information would you want to help you assess the situation?

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  • CreatedFebruary 26, 2015
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