Textbook Problem

Use online resources to work on this chapter's questions. Please note that website information changes over time, and these changes may limit your ability to answer some of these questions.

In this chapter's opening vignette, we discussed Apple's decision to establish a dividend payout policy in 2012 and its subsequent decisions to increase quarterly dividends and raise its repurchase program to $175 billion. Let's find out what has happened to Apple's (AAPL) dividend policy since the time of its original announcement. We can address this issue by relying on data provided on internet financial websites such as Yahoo! Finance, Morningstar.com, Google Finance, and MSN Money (www.msn.com/en-us/money/markets). You will have to use a combination of these sites to answer these questions.

3. Refer back to question 1. Manually plot earnings per share, dividends per share, and cash flow per share over time. In the text, we point out that dividends are often more stable than earnings, that cash flows track earnings very closely, and that cash flow per share exceeds dividends per share by a safe margin. Do you see a similar pattern for Apple? Explain. (Note that Morningstar.com provides cash flow information for a 10-year period.)