The managing Director of Guyguy company ltd, a listed pharmaceutical company, intends to boost its share price by having a higher dividend payout ratio. Below is the financial highlight of Guyguy ltd for 2016. Earnings per share                            GHC8                                    Dividend payout ratio                         30%      Discount rate                                         18% Return on retained earnings               25% Briefly discuss the managing director’s assertion of increasing the company’s share price by having a higher dividend payment. Outline and explain five factors that may influence the dividend policy of Guyguy ltd

Financial Reporting, Financial Statement Analysis and Valuation
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ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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Chapter12: Valuation: Cash-flow Based Approaches
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The managing Director of Guyguy company ltd, a listed pharmaceutical company, intends to boost its share price by having a higher dividend payout ratio. Below is the financial highlight of Guyguy ltd for 2016.

Earnings per share                            GHC8                                   

Dividend payout ratio                         30%     

Discount rate                                         18%

Return on retained earnings               25%

  1. Briefly discuss the managing director’s assertion of increasing the company’s share price by having a higher dividend payment.
  2. Outline and explain five factors that may influence the dividend policy of Guyguy ltd.
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