15-4 Would you expect a company in a rapidly growing technological industry to have a high or low dividend payout ratio?

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Jamar FerryLv2

26 Sep 2018

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Question (a) (Shortquestions)

1. What is (are) the advantage(s) ofusing common-size statements as against comparative statements inanalyzing a companyâs financial performance and position?

2. What are the advantages andlimitations of using financial ratios?

3. ABC company experiences a greatdeal of seasonal variation in its business activities. Thecompanyâs high point in business activity is in June; its low pointis in January. During which month would you expect the currentratio to be highest?

4. Apple Inc., is in a rapidly growingtechnological industry. Would you expect the company to have a highor low dividend payout ratio?

5. If a stockâs market value exceeds its book value, then thestock is overpriced. Do you agree? Explain.

6. A company with no liabilities is good for investors. Do youagree? Explain

Review the 1) dividends for the past three years and 2) capital structure of coca cola company

	2017	2016	2015
Dividend per Share	1.48	1.4	1.32
Dividend Yield	3.60%	3.20%	3.10%
Dividend Payout	$6320 m	$6043 m	$5741 m

What has occurred with your selected companyâs dividend payout, dividend yield, and dividend per share over the past three years? Do you have any explanations for what has occurred? Also, has this company had any stock splits or stock repurchases in recent years?

How does your selected companyâs dividend payout, dividend yield, and dividend per share compare with other companies in its industry? Has the companyâs dividend strategy been similar to other companies in its industry?

Use Excel to plot your selected companyâs earnings and dividends over the past three years. Do you notice any patterns? What dividend policies from the background readings best match these patterns?

15-3 Assume that two companies in the same industry have equal earnings. Why might these companies have different price-earnings ratios? If a company has a price-earnings ratio of 20 and reports earnings per share for the current year of $4, at what price would you expect to find the stock selling on the market?

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15-4 Would you expect a company in a rapidly growing technological industry to have a high or low dividend payout ratio?

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