Below are the EPS and the dividends per share of three companies. a. What are the payout

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Below are the EPS and the dividends per share of three companies.

Beta Co. Alpha Co. Delta Co. EPS EPS DPS EPS DPS DPS $4.00 $2.00 $4.00 4.20 $2.00 $4.00 $2.00 1.50 4.20 2.10 2.00 4.20 2

a. What are the payout ratios for each company on an annual basis?
b. Can you explain some of the reasons for such differences in payout patterns?
c. Which company would you prefer to own as a shareholder? (Assume the bottom row is the most recent year's data.) Why? What other kinds of information would you want before you invested your money?

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Foundations of Financial Management

ISBN: 978-1259024979

10th Canadian edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

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Question Posted: Sep 15, 2018 10:52 AM

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Below are the EPS and the dividends per share of three companies. a. What are the payout

Question:

Beta Co. Alpha Co. Delta Co. EPS EPS DPS EPS DPS DPS $4.00 $2.00 $4.00 4.20 $2.00 $4.00 $2.00 1.50 4.20 2.10 2.00 4.20 2.40 4.80 4.80 2.00 4.80 2.00 5.60 5.60 2.80 2.00 5.60 3.00 6.00 3.00 6.00 2.30 6.00 2.00

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a Payout ratios Year Alpha Beta Delta 1 50 500 500 2 50 476 357 3 50 417 417 4 50 357 536 5 50 383 3...View the full answer

Foundations of Financial Management

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