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Module 4 - SLP
LEVERAGE, CAPITAL STRUCTURE, AND DIVIDEND POLICY
Review the 1) dividends for the past three years and 2) capital structure of the company you have been researching for your SLP assignment. Then answer the following questions in a Word document (except for the Excel portion specifically noted). The paper should be 2 pages in length.
- What has occurred with your selected company’s 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 company’s dividend payout, dividend yield, and dividend per share compare with other companies in its industry? Has the company’s dividend strategy been similar to other companies in its industry?
- Use Excel to plot your selected company’s earnings and dividends over the past three years. Do you notice any patterns? What dividend policies from the background readings best match these patterns?
SLP Assignment Expectations
- Answer the assignment questions directly.
- Stay focused on the precise assignment questions. Do not go off on tangents or devote a lot of space to summarizing general background materials.
- For computational problems, make sure to show your work and explain your steps.
Module 4 - Background
LEVERAGE, CAPITAL STRUCTURE, AND DIVIDEND POLICY
Required Reading
Please read through the following book chapters. Pay special attention to the concepts of operating leverage, financial leverage, business vs. financial risks, and the major theories of capital structure choices.
Vishwanath, S. (2007). Chapter 19: Optimal capital structure. Corporate finance: Theory and practice. SAGE Publications India. Available in the Trident Online Library.
Finally, take a look at the following book chapter on dividend policy. Take a close look at the concepts of regular dividend policy and low-regular-and-extra dividend policy, as well as stock splits and stock repurchases:
Clive, M. (2012). Chapter 15: Dividend policy. Financial management for non-financial managers. Kogan Page. Available in the Trident Online Library.
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Running head: LEVERAGE, CAPITAL STRUCTURE AND DIVIDEND POLICY
Leverage, Capital Structure and Dividend Policy
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LEVERAGE, CAPITAL STRUCTURE AND DIVIDEND POLICY
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Leverage, Capital Structure and Dividend Policy
Dividend Payout and Dividend Yield
Over the last decade, Apple's overall performance has been exceptional, with a revenue
of over 210 million annually in the last five years. While the company's success has been
attributed by numerous factors, including its related diversification strategy, as noted in our
previous discussion, the company's equity investors have also greatly benefited from this.
According to Macrotrends (2020), Apple's dividend payout (TTM) has been rising in the last
three years. As per 19th August 2020, Apple Inc. had a dividend payout of $3.13. Further, as per
9th August 2019, its dividend payout was a bit lower as it was $3.00 (Macrotrends, 2020). To
complete the analysis of Apple’s dividend payout in the last three years, its dividend payout as
per the 10th of August 2018 was $2.68. On the other hand, Apple’s dividend yield in the last
three years has been unstable, where it has been increasing and decreasing during the period. As
per 19th August 2020, Apple Inc. had a dividend yield of 0.68%, which fell from 1.49% as
recorded on 9th August 2019. Further, Apple's dividend yield as per the 10th of August 2018 was
1.3% (Macrotrends, 2020).
Apple’s Dividend per Share, Explanations and Dividend Strateg...