a) You are examining the dividend policy of a large medical equipment manufacturing company, Hansell Ltd....
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a) You are examining the dividend policy of a large medical equipment manufacturing company, Hansell Ltd. The following chart shows the company's EPS and DPS from 2014 to 2018. What dividend policy does the graph suggest the company has adopted in the past? (5 marks) $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $- 2014 2015 2016 2017 2018 -EPS $1.60 $4.20 $4.80 3.6 2 DPS 50.80 $2.10 $2.40 $1.80 $1.00 -EPS -DPS b) A successful growth company, Disher and Raykell Healthcare Ltd, also operates in the medical equipment industry. It has been generating regular earnings over the same period as Hansell Ltd but never pays any cash dividends. Explain this practise of not paying cash dividends based on: (i) the clientele effect (5 marks); AND (ii) dividend signalling theory (5 marks) a) You are examining the dividend policy of a large medical equipment manufacturing company, Hansell Ltd. The following chart shows the company's EPS and DPS from 2014 to 2018. What dividend policy does the graph suggest the company has adopted in the past? (5 marks) $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $- 2014 2015 2016 2017 2018 -EPS $1.60 $4.20 $4.80 3.6 2 DPS 50.80 $2.10 $2.40 $1.80 $1.00 -EPS -DPS b) A successful growth company, Disher and Raykell Healthcare Ltd, also operates in the medical equipment industry. It has been generating regular earnings over the same period as Hansell Ltd but never pays any cash dividends. Explain this practise of not paying cash dividends based on: (i) the clientele effect (5 marks); AND (ii) dividend signalling theory (5 marks)
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a The company has been employing a constant dividend payout policy where the company maintains the s... View the full answer
Related Book For
Investment Analysis and Portfolio Management
ISBN: 978-0538482387
10th Edition
Authors: Frank K. Reilly, Keith C. Brown
Posted Date:
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