Reference no: EM132331076
Advanced Corporate Finance Assignment -
In this assignment, you will study the dividend payout policy and its influence on stock price. Choose a mature firm from stocks on the ASX and make sure that the firm pays a dividend. Your tasks include:
1. Explain and justify the criteria that you used to identify the mature firm.
2. Calculate the dividend yields and dividend payout ratios of the firm in the last five years (financial year from 1 July 2013 to 30 June 2018). Explain how the ratios are calculated. Determine whether there has been a major change in the company's dividend policy in the last five years and discuss the possible reasons why there is/isn't a major change (use appropriate payout policy theories).
3. Using the data of 2017 and 2018 financial year (from 1 July 2016 to 30 June 2018) to answer the following questions:
(a) How frequently does the company pay a regular dividend?
(b) What is the amount of the dividend?
(c) By what date must your share be registered with the company in order to receive the dividend?
(d) How many weeks later is the dividend paid?
(e) To what extent are the dividends franked?
4. Using data for 2017 and 2018 financial year, examine the ex-dividend price movements. How big was the price change relative to the dividend? Calculate the effective dividend tax rates for each of the dividends. Critically analyse your observations.
5. Using data for the last two years, report the price movement at the time of the dividend announcements. How do you interpret these price movements in light of finance theory?
Format: Each of the questions should be clearly and concisely answered. You may directly add your answer below the corresponding question. You are not recommended to present this assignment as a report, but it is acceptable if you choose to. Make sure to edit your assignment before submitting. The font, size, alignment, line space must be consistent throughout. Tables and diagrams should be numbered and captioned. You are expected to use tables and diagrams to summarise or emphasise findings but the information in a table/diagram must be referred to and clearly explained in-text.
Word limit: No less than 1300 words and no more than 1800 words, including the questions, tables and diagrams but excluding the reference list. You must present your answers using no more than eight pages (A4 size), excluding the cover page and reference list.
Referencing: Make sure to acknowledge your data resources appropriately. Citations and the reference list must be prepared following Harvard style referencing.