Refer to the financial statements of Canadian Tire Corporation (Appendix A) and RONA Inc. (on Connect) and the Industry Ratio Report (Appendix B on Connect).
Required:
1. Canadian Tire Corporation split its stock in the past. Describe the impact that the split would have on the market value of the stock compared to a company that did not split its stock. Why do some companies elect to split their stock?
2. Calculate the dividend yield ratios for Canadian Tire (assume a market price of $ 69 per share) and RONA (assume a market price of $ 10.5 per share) for the most recent reporting year.
3. Why would an investor choose to invest in a corporation whose board of directors does not declare and pay dividends?
4. Using the information from the following table, compare the dividend- related industry average ratios for the retailing industry to the media industry and the utilities industry. What type of investor would be interested in buying shares in a utility instead of a retailing company? Why?

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DIVIDEND RATIOS FOR VARIOUS INDUSTRIES Industry Media Retailing RONA Inc. Utilities Dividend Yield 2.56% 1.50% 5.35% Example Company Cineplex Inc ATCO Ltd.