Often Plc is a company that is still managed by the two individuals who set it...

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Often Plc is a company that is still managed by the two individuals who set it up 12 years ago. In the current year, the company acquired Plc status. Previously, all of the shares had been owned by its two founders and certain employees. Now 40% of the shares are in the hands of the investing public. The company's profit growth and dividend policy areset out below. Year Profit Share in issue (K'000) 176 200 20x1 20x2 20x3 240 290 Divided (K'000) 88 104 120 150 800 000 20x4 20x5 (current) 444 Required i) Give an analysis of the current Dividend policy and evaluate whether a combination of the same dividend policy would be suitable given that the company is now listed on the stock exchange (7 MARKS) 222 (proposed) 800 000 1000 000 1000 000 1500 000 ii) Distinguish the factors that should be taken into consideration when determining a firm's dividend policy. (3 MARKS) Often Plc is a company that is still managed by the two individuals who set it up 12 years ago. In the current year, the company acquired Plc status. Previously, all of the shares had been owned by its two founders and certain employees. Now 40% of the shares are in the hands of the investing public. The company's profit growth and dividend policy areset out below. Year Profit Share in issue (K'000) 176 200 20x1 20x2 20x3 240 290 Divided (K'000) 88 104 120 150 800 000 20x4 20x5 (current) 444 Required i) Give an analysis of the current Dividend policy and evaluate whether a combination of the same dividend policy would be suitable given that the company is now listed on the stock exchange (7 MARKS) 222 (proposed) 800 000 1000 000 1000 000 1500 000 ii) Distinguish the factors that should be taken into consideration when determining a firm's dividend policy. (3 MARKS)

Answer rating: 100% (QA)

i Analysis of Current Dividend Policy The current dividend policy seems inconsistent with dividends ... View the full answer