The following summary of the earnings per share (in U.S. $), price-earnings (P-E), payout, and dividend yield ratios is available for five years ended December 31 for Barrick Gold Corporation:

Instructions
(a) What are some possible reasons that Barrick Gold's dividend payout ratio improved from 23% in 2007 to 44% in 2008 while its dividend yield ratio changed very little from 0.9% in 2007 to 1.1% in 2008?
(b) Why do you think Barrick Gold's price-earnings ratio was higher in 2008 than in 2007 even though its earnings per share was lower?
(c) If you were an investor looking for dividend income, would you be happy with Barrick Gold's dividend policy? Explain.
(d) If you were one of Barrick Gold's creditors, what would you think about the company continuing to pay dividends (e.g., in 2009) regardless of whether it reports profit or a loss? Explain.

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P-E Ratio 21.1 times 26.8 39.6 n/a 16.0 Dividend Yield 0.7% 0.9 1.1 1.1 0.9 Earnings per Share Payout Ratio 13% 23 2006 2007 2008 2009 2010 $1.44 1.29 0.90 (4.73) 3.32 13