BMT is a company that has been listed on the London Stock Exchange for many years. Institutional investors own approximately 45 per cent of the ordinary shares of the company. The recent financial performance of the company is shown below. Using the information provided, comment on the dividend policy of BMT and critically discuss whether this dividend policy is likely to be acceptable to its institutional investors.

Transcribed Image Text:

Year Turnover (£ million) Earnings per share (pence) Dividend per share (pence) Annual inflation (%) 6 3.3 34.2 11.4 3.1 5 3.1 33.0 11.1 3.4 4 2.7 29.2 9.9 3.1 3 2.6 28.6 9.6 2.4 2 2.5 27.6 9.2 3.4 1 2.0 25.4 8.5 2.5