The Predictions And Effects Of Financial Accounting

Introduction In the main analysis, this essay will describe the predictions and effects of financial accounting reports to discuss the statement based on the previous answer. In the conclusion, the essay will explain how the question helps to understand the importance of learning about accounting in its context. Main Analysis Predictions of Financial Reporting There are four preconditions of financial accounting reporting. Firstly, there are debates that upheld and against the regulation of financial accounting. The supporters of the ‘free-market’ technique dispute that there are proprietary economic incentives for organizations to report accounting information proactively, and forcing accounting regulation is costly inefficient (Deegan Unerman, 2011). By comparison, the supporters of the ‘pro-regulation’ viewpoint dispute that regulation is requisite as financial information is a ‘public good’, and users of accounting information are ‘free riders’, so organizations will report a lower quantity of information than socially optimal (Deegan Unerman, 2011). Secondly, various stakeholders have various viewpoints of the evolution of regulation. According to public interest theory, regulation is introduced to safeguard the community and regulators attempt to maximize public welfare (Deegan Unerman, 2011). According to capture theory, regulated organizations will obtain command of the regulating procedure (Deegan Unerman, 2011). According to private interest theory,Show MoreRelatedFinancial Accounting Theory the Reporting Environment1578 Words   |  7 PagesWeek 2: Topic 1: Financial Accounting Theory the Reporting Environment GHTHH Chapter 2 5. 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What Is Climate Change - 944 Words

2.1 What is Climate Change? Climate change is the subject of how weather patterns change over decades or longer. Climate change takes place due to natural and human influences. Since the Industrial Revolution (i.e., 1750), humans have contributed to climate change through the emissions of GHGs and aerosols, and through changes in land use, resulting in a rise in global temperatures.1 Increases in global temperatures may have different impacts, such as an increase in storms, floods, droughts, and sea levels, and the decline of ice sheets, sea ice, and glaciers. 2.2 Process of Global Warming The earth receives energy through radiation from the sun. GHGs play an important role of trapping heat, maintaining the earth’s temperature at a level that can sustain life. This phenomenon is called the greenhouse effect and is natural and necessary to support life on earth. Without the greenhouse effect, the earth would be approximately 33 °C cooler than it is today.2 In recent centuries, humans have contributed to an increase in atmospheric GHGs as a result of increased fossil fuel burning and deforestation. The rise in GHGs is the primary cause of global warming over the last century. There are three main datasets that are referenced to measure global surface temperatures since 1850.3 These datasets show warming of between +0.8 °C and +1.0 °C since 1900.4 Since 1950, land-only measurements indicate warming trends of between +1.1 °C and +1.3 °C, as land temperatures tend to respondShow MoreRelatedWhat Is Climate Change?1794 Words   |  8 PagesJean in a span of only six weeks ¹. At five years old, I had no concept that this was an unusually large number of hurricanes to be hitting central Florida, let alone the fact that the intensity and number of these storms was likely exacerbated by climate change. 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Financial Management Identification and Management

Question: Discuss the management of Equity and Debt as part of the long term funding requirements of companies. Answer: Introduction: The report is intended to conceptualize management of equity and debt. Debt equity ratio plays a crucial role in assessing the risk level of a particular company. The dependency of the ratio lies in the amount of both long term and short borrowings divided by the shareholders fund, popularly known as proprietary funds. Thus it is important to understand the various findings of the ratio and working of the same. From the perspective of the risk debt equity ratios lower than 0.4 or lower are considered as ideal for a particular company, the higher is the ratio it is more difficult for the company for borrowing of credit. Hence it is crucial for a company to maintain a low debt equity ratio for the purpose of the balancing the risk and take financial credit during emergencies or debt crisis. (De Franco et al. 2013). The study shows the comparison of the debt equity ratio on the basis of two non financial companies based on London Stock Exchange, namely Tesco PLC and Sainsburys. Both the selected companies are leading retail companies of UK. The calculation of the debt equity ratio of both the companys excludes the financial services of both the companies. For the purpose of the evaluation for the debt equity ratio the annual report for the last five years has been taken into consideration. The total amount of the debt and the equity has been represented in form of graphs and charts for a clear visual representation of the changes in the value of debt- equity for last five years. All the values of the shareholders find and long-term debt of the company has been studied from the annual reports of the selected organizations. (Tesco plc. 2016) Description of the management of the equity Equity is the difference of the presently available assets for the company and the liabilities currently incurred for a particular financial year. Equity can also be calculated based on the shareholders funds is divided by the total value of the assets. The equity shows the overall financial strength of a particular company and acts as the test for a sound capital structure for a particular company. The maintenance of higher amount of equity by a company ensures that the lower amount of interest is required on the available capital. On the other hand, a company with lower amount of equity is prone to losses (Bolton et al. 2015). In the main components of the equity comprises of the components such as Capital and reserves, called up share capital, share premium and reserve created for the purpose of profit and loss. The annual report of a company represents the retained earnings, which is essential for the purpose for calculation of the amount of the equity. (Schmitz 2015). In practical scenario, a company has to make amendment sand reveal the same related to the various types of the changes for equity by the revilements of the various types of particulars such as comprehensive income or losses, changes in the fair value of the finances available for the purpose of sale. The various type of the equity instrument used by a company is further recorded at the proceeds of the direct cost received. The equity components also take in to consideration the annual report also includes the perpetual capital securities and the perpetual convertible bonds (Green 2013). The main purpose for the management for the equity of the company is to keep the present members satisfied. If the amount of equity is managed effectively financing of the debt. A liability level affects liability to obtain credit and then various terms and conditions. The sufficient amount of the availability of the equity allows for additional financing of the debt at the time of emergency and various process related to the aversion of the risk (Finocchiaro and Mendicino 2013). Description of the management of the debt The debt ratio is firms total liabilities in terms of the percentage of the total assets. In other words the debt shows the number of assets, which a firm must sell off in order to pay off the liabilities. Then formula used to calculate the debt ratio is used as total liabilities over the total assets. The various type so of the debt management techniques is essential for a company to know about the various types of the payment which are held with the creditors and they need to be addressed at soon as possible in order to clearance of the same. The various types of the debt management techniques plays an essential role for the purpose of maintaining a feasible financial position of a company and improve the overall financial, situation through a reduced policy structure to keep the amount of then debt low. The debt has a direct impact on the debt equity ratio for the company and keeping then amount of debt low is essential to maintain a low amount of the overall debt equity ratio. Th e main purpose of the debt management team of the company is to formulate a plan for speaking to the unsecured creditors of the company. These creditors need to b e negotiated for the purpose of the payment and the final payment terms should be kept low as much as possible. The debt management technique is important to keep the repayment affordable at the end o the each moth and clearing of the various types of the creditors in order to keep the amount of the creditors lower. (Blessing 2012) An extensive analysis of the Annual report of a company includes the various types of the debts such as bank overdraft, borrowing (both long and short term), financial leases, then various type of the financial derivative. The purpose of the report is to include the calculation of the various types debt and the equity components of the nonfinancial firms the annual report clearly states that the debt evaluation excludes the value of the selected companys own net debt balances (Long and Phi Nga 2015). Some of the important components of the debt include components such as Inventories and trade and other receivables, deferred tax liability, Post-employment benefits, Liabilities of the disposal groups. The important aspect of debt management includes the forecasting of the debt from beforehand and keeping the reserves in case of a financial crisis. (Alves et al.2016). The importance of the debt management technique lies in the flexibility to make the payment related to the provisions made for the future investment, which are made by a company in general perspective. Evaluation and comparison of the equity and debt of Tesco and Sainsburys The evaluation of the debt equity ratio is based on the comparison of the Debt-equity is based on the calculation of five year basis. The debt equity calculation of Tesco PLC is shown below as follows: TESCO Particulars 2012 2013 2014 2015 2016 ( 000) ( 000) ( 000) ( 000) ( 000) Total Debt 6,838 6,597 6,597 8,481 6,085 Shareholder's Fund 17,801 10,464 9,399 12,450 12,682 Debt/Equity Ratio 0.384 0.630 0.702 0.681 0.480 (Sokolowska and Wisniewski 2015) Graphical representation of the debt/equity ratio The debt equity calculation of Sainsbury PLC is shown below as below: Sainsbury PLC 2012 2013 2014 2015 2016 ( 000) ( 000) ( 000) ( 000) ( 000) Total Debt 1,980 2,162 1,164 1,467 1,826 Shareholder's Fund 5,629 5,734 5,539 6,005 6,365 Shareholder's Fund 0.352 0.377 0.210 0.244 0.287 The graphical representation of Sainsbury PLC is shown below as follows: Comparison of the debt/ equity ratio of Tesco PLC The analysis of the debt equity shows that the company is able to keep the debt equity ratio sufficiently low to around 48%. The analysis of the financial data showed an increase in the debt amount in the year 2014 with a debt equity ratio of 0.702 and the company observed the lowest amount of debt equity ratio in the year 2012. In the present times, the debt equity ratio was observed to be 0.480. The graphical representation further shows the decreasing trend of the debt equity ratio of Tesco PLC. (Palley 2013). Comparison of the debt/ equity ratio of Sainsburys PLC The debt equity ratio analysis of Sainsburys PLC shows that the company had observed the best debt equity ratio in the year 2014 with a ratio of 0.210. The debt equity ratio of Sainsburys PLC further shows that the debt equity ratio at the initial level that is in the 2012 was 0.352 and it increased to 0.377 in the year 2013. This can be clearly seen with the graphical representation which shows that that initially the company has observed a high amount of debt in the year 2012, then it observed a decrease in the year 2014 and it was again able to manage its debt equity ratio to a standard position in the year 2016. (Said 2013). Comparison of debt equity of Tesco PLC with Sainsburys PLC The comparison of the financial position of both the company shows the financial position of Sainsburys PLC is in a better position than TESCO. As per the recent data of the annual report of Tesco the debt equity ratio of the company stands at 0.480 approximately whereas the debt equity ratio of Sainsburys PLC is observed to be 0.287. This measure of the financial performance by the company is found to be ideal to be maintained by the company as it will help the company to secure a better scope to obtain financial credit in the future. (Langenmayr et al. 2015). Conclusion and recommendation The first section of the report gives a general perspective of the management of the debt and equity by a company. The understanding of the various types of the concepts for the debt equity management is based on the present industry standards. After the comparison of the balance sheet of both the companies for the past five years it had been observed in Tesco needs to lower the debt amount considerably. It had been further observed that highest amount of the debt of the company was observed through bank and borrowing from the financial institutions. This trend was found to be similar for all the five years. The average borrowing was observed to be at 12000 million pounds for all the five years. This amount needs to be improved for the purpose of the improvement of the debt equity ratio. On the other hand the high amount of equity has been observed from the funds observed from share premium account and it should further work on improving it even further. The main source of the debt h as been observed from the borrowing of the company which is approximately observed as 2000 million for the past five years. This needs to be reduced by the company to reduce the debt equity ratio and improve the financial performance of the company. Hence it is important to consider all the aspects to improve the debt equity ratio (Levi and Segal 2015). Reference List Alves, N.S., Mendes, T.S., de Mendona, M.G., Spnola, R.O., Shull, F. and Seaman, C., 2016. Identification and management of technical debt: A systematic mapping study. Information and Software Technology, 70, pp.100-121. Blessing, P.H., 2012. The debt-equity conundruma prequel. Bullr Int Tax, pp.198-212. Bolton, R.N. and Tarasi, C.O., 2015. 14. Risk considerations in the management of customer equity. Handbook of Research on Customer Equity in Marketing, p.335. De Franco, G., Vasvari, F.P., Vyas, D. and Wittenberg-Moerman, R., 2013. Debt analysts' views of debt-equity conflicts of interest. The Accounting Review, 89(2), pp.571-604. Finocchiaro, D. and Mendicino, C., 2013. Debt, Equity and Monetary Policy. Green, S.F., 2013. Achievement and Private Equity in the UK. The Social Life of Achievement, 2, p.139. Langenmayr, D., Haufler, A. and Bauer, C.J., 2015. Should tax policy favor high-or low-productivity firms?. European Economic Review, 73, pp.18-34. Levi, S. and Segal, B., 2015. The Impact of Debt-Equity Reporting Classifications on the Firm's Decision to Issue Hybrid Securities. European Accounting Review, 24(4), pp.801-822. Long, P.Q. and Phi Nga, N.T., 2015. Debt risks and risk management of public debt: survey from theory to practice. Economic Studies, (8), pp.69-77. Palley, T.I., 2013. Financialization: what it is and why it matters. In Financialization (pp. 17-40). Palgrave Macmillan UK. Said, H.B., 2013. Impact of ownership structure on debt equity ratio: A static and a dynamic analytical framework. International Business Research, 6(6), p.162. Schmitz, C., 2015. Equity valuation of Tesco Plc (Doctoral dissertation). Sokolowska, E. and Wisniewski, J., 2015. Liquidity management by effective debt collection: a statistical analysis in a small industrial enterprise. Ekonomika, 94(1), p.143. Tesco plc. (2016). Tesco PLC. [online] Available at: https://www.tescoplc.com/ [Accessed 23 Jul. 2016].

Questions on Financial Management Essay Example

Questions on Financial Management Essay Sensitivity analysis provide information for decision makers to more informed about project sensitivities, to know the room they have for judgemental error and to decide whether they are prepared to accept the risks. During the implementation phase of the investment process the original sensitivity analysis can be used to highlight those factors which have the greatest impact on NPV. Decision makers can draw on key parameters differ significantly from the estimates. For example, this project is highly sensitive to the price of product. $50 of change can make a great impact on NPV. Managers after recognising this from the sensitivity analysis should make some plans to avoid big change of price. From sensitivity analysis of Pentre plc, we can see market size in year 2 to year 5 is more sensitive than market size in year 1. Thus the company should take more efforts to keep and extend its market share from second year. Sensitivity analysis also has many drawbacks. For example, the absence of any formal assignment of probabilities to the variations of the parameters is a potential limitation. Change of government policy, eventuality impact such as SARS. We will write a custom essay sample on Questions on Financial Management specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Questions on Financial Management specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Questions on Financial Management specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Another criticism is that each variable is changed in isolation while all other factors remain constant. For example, if inflation is higher then both anticipated selling prices and input prices are likely to be raised. b) Merits and Drawbacks of the Use of Internal Rate of Return The Internal Rate of Return (IRR) is the discount rate at which the Net Present Value (NPV) of a project equals zero. The IRR decision rule specifies that all independent projects with an IRR greater than the cost of capital should be accepted. When choosing among mutually exclusive projects, the project with the highest IRR should be selected). IRR method has many advantages that make it one of the most widely used methods for evaluating capital investments. First, the IRR makes an appropriate adjustment for the time value of money. The value of a dollar received in the first year is greater than the value of a dollar received in the second year, and even cash flows that arrive several years in the future receive some weight in the analysis. Second, the hurdle rate itself can be base on market returns obtainable on similar investments. This takes away some of the subjectivity of other analytical methods that must be made when using payback or accounting rate of return, and it allows managers to make explicit, quantitative adjustments for differences in risk across projects. Third, because the answer that comes out of an IRR is a rate of return, it is easy for both financial and nonfinancial managers to grasp intuitively. Fourth, the IRR technique focuses on cash flow rather than on accounting measures of income. Though it represents a substantial improvement over payback or accounting return analysis, the IRR technique has its own set of problems that should analysis. One common problem is the difficulty associated with its calculation. In most circumstances the IRR of a project can only be found by trial-and-error. This is because the number of periods (or cash flows) involved in the project needs to be solved to calculate the IRR. IRR is the discount rate at which the NPV of a projects cash flows in equal to zero. Since zero is a number that lies between a positive number and a negative number, IRR must lie between two discount rates. So we need to guess a starting point to perform the interpolation. The second problem is that the nature of the rule must be modified depending on whether the project under evaluation is an investing project or a financing project (e.g. borrowing money from a bank). In the case of an investment, a corporation will accept a project with a high rate of return. With a financing project, the corporation is looking for the cheapest source of finance. Hence, the decision rule for a project must be modified to take into account whether it is an investment project or a financing project. Another problem with the IRR technique arises from the fact that a rate of return does not take into consideration the size of a project. This is sometimes referred to as the problem of scale. Incorrect investment decisions could be made when applying the IRR rule, because it ignores projects sizes. QUESTION 2: Valuing Shares Year 1 2 3 4 5 Retentions 180.00 148.80 124.99 111.97 116.17 Retention ratio 60% 40% 30% 25% 25% Incremental earnings 72 44.64 31.25 16.80 Incremental earnings ratio 40% 30% 25% 15% Profit 300.00 372.00 416.64 447.89 464.68 Dividend paid 120.00 223.20 291.65 335.92 348.51 g = retention rate * return on investment = 25% * 15% = 3.75% a) i. Dividend model V4 = D5 / (r g) = 348.51 / (15%-3.75%) = 3097.87 V0 = 120*0.8696+223.2*0.7561+291.65*0.6575+335.92*0.5718+3097.87 *0.5718 = 104.35+168.76+191.76+192.08+1771.36 = 2428.31 a) ii. Earnings based model E * 1/15% = 3001/15% = $2000 Vt = 180*0.8696 + 148.8*0.7561 + 124.99*0.6575 + 111.97*0.5718 = 156.53+112.51+82.18+64.03 =$415.25 R5 / (r g) * 0.5718 = 116.17 / (15%-3.75%) * 0.5718 = 590.45 V0 = 2000 + 415.25+ 590.45 = 3005.7 a) iii. Assumptions There are no taxes. The absence of corporate income taxes is assumed. There are no costs of financial distress. For example, there are no transactions costs, and all securities are infinitely divisible. There are no asymmetries of information. It implies that the expected values of the probability distributions of expected operating earnings for all future periods are the same as present operating earnings. The investment and operating policies of the firm are given and investors are assumed to be rational and to behave accordingly. b) Price earnings ratio A price-earning ratio is a commonly used way to simplistically value a company, determine what a companys stock should be worth. It is also known as P/E, is calculated by dividing the companys stock price by the companys earnings per share, or EPS. The P/E ratio gives an indication of how many times shareholders paying for a companys stock compares a companys earnings. P/E ratios can be used to compare against other companies, or against a companys own historical P/E ratio. Investors usually are willing to pay a higher P/E for companies they judge will be growing faster than the norm even though they do not pay those earnings out in dividends but retain them to fund future growth. If that growth is realized, the price of the companys stock usually grows faster than the overall stock price of the slower growth or higher dividend paying company. However, if estimated earnings are not realized or the stock market itself loses favor with the investor, such as higher interest rates attracting investment capital, the downside potential is greater as well. The risk is not just the ability of the company to create profits, but the investment risk in the higher price you paid relative to earnings. OSIM International LTD FY2003 Dec FY2002 Dec FY2001 Dec FY2000 Dec Adjusted EPS (Earnings/Current no. of Shares) $0.05387 $0.03836 $0.02997 $0.02113 P/E Ratio (Current price/Adjusted EPS) 18.93 26.59 34.03 48.27 http://www.listedcompany.com/ir/osim/web/stock.cgi OSIM is a global leader in healthy lifestyle products. It is the leading Asian brand for healthy lifestyle products. OSIMs P/E ratio decreased in the four years though the EPS increased rapidly. This means investors predict companys future isnt as good as former years. The price is going down, but the risk is lower than before. However, this is also a good growth stock for those who can buy and hold for further growth including bonus issues which the company had given every few years because healthy lifestyle products has a good outlook in the future. Brilliant Manufacturing Limited. FY2003 Sept FY2002 Sept FY2001 Sept FY2000 Sept Adjusted EPS (Earnings/Current no. of Shares) $0.04622 $0.01526 $0.00350 0.01327 P/E Ratio (Current price/Adjusted EPS) 12.98 39.32 171.43 45.21 http://www.listedcompany.com/ir/brilliant/web/stock.cgi? Brilliant Manufacturing produces precision machining of 5.25 floppy disk drive aluminium housing for Tandon in Singapore. After the acquisition of Tandon by Western Digital, The Company grew substantially from servicing Western Digital to other valued customers in the Hard Disk Drive (HDD) sector. P/E ratio decreased rapidly from 2002, this is because the boom of computer and internet industry in 2001. Stepped to 2003, due to the down results for the financial year, P/E ratio dropped quickly from 39 to 13 but the earnings also increased almost 4 times last year. That means the investment is worth and the company is still earning profits. Giant Wireless Technology FY2004 Mar FY2003 Mar FY2002 Mar FY2001 Mar Adjusted EPS (Earnings/Current no. of Shares) $0.02283 $0.02825 $0.02638 $0.02751 P/E Ratio (Current price/Adjusted EPS) 14.89 12.04 12.89 12.36 http://www.listedcompany.com/ir/giant/web/stock.cgi? Since commencing its operations in 1988, Giant Wireless Technology has grown to become a leading developer and manufacturer of wireless telecommunications solutions and electronics products for the U.S., Europe and China markets. Though the EPS decreased from FY2003 to FY2004, the P/E ratio increased 2 percent. This means investors give a high prediction to company. They willing to pay a higher P/E for company, judge company will be growing faster than the norm even though they do not pay those earnings out in dividends but retain them to fund future growth. If that growth is realized, the price of the companys stock usually grows faster than the overall stock price of the slower growth or higher dividend paying company. QUESTION 3: Financing Decisions a)i. earning per share Current Proposed Assets Debt (9%) Equity Market Value/Share Shares outstanding EBIT Interest Tax (30%) Return on equity(Earnings after Interest ;Tax) $1680m 0 $1680m $4 420m $300m 0 $90m $210m $1680m $600m $1080m $4 270m $300m $54m $73.8m $172.2m Earning per share(EPS) $0.5 $0.64 a)ii. Level of earning at which EPS will be same Current Proposed Assets Debt (9%) Equity Market Value/Share Shares outstanding EBIT Interest Tax (30%) Return on equity(Earnings after Interest ;Tax) $1680m 0 $1680m $4 420m 0 EBIT*30% ? $1680m $600m $1080m $4 270m $54m (EBIT-54)*30% ? Earning per share(EPS) $0.5 $0.5 EBIT 0 EBIT*30% = EBIT 54 (EBIT-54)*30% 420 270 EBIT = 151.2 b) Discuss some of the factors that are likely to limit the amount of debt that a company is likely to want to employ in its financing. Company is financed by ordinary shares (equity) or debt. Generally, debt has a cheaper direct cost than equity. There are two distinct reasons for this: ; Debt has low risk results in a low required return. Thus, company can reduce the cost of financing. ; Interest can be paid before taxation, whereas dividends are not. However, borrowing isnt perfect. To determining how much debt to use, corporate should first consider taxes. The government allow corporations to deduct interest payments from income before taxation, this essentially subsidizes dollar paid in interest. But any borrowing at all will cause the cost of equity capital to rise, offsetting the cheap direct cost of debt. Financial distress may also keep firms from loading up on debt. Explicit financial distress costs include the payments made to lawyers, accountants, and so on. they reduce the cash flows that will eventually be paid to the bondholders and stockholders. Clearly, investors would prefer that firms stay out of financial distress so that these losses are not incurred. Corporations must also consider the indirect costs of bankruptcy. As the firm takes on more and more debt, the probability of bankruptcy increases. This cause the firm will not be able to meet interest payments in any given year and will be forced into default goes up as the amount of debt and corresponding interest increases. It includes the costs of low inventories, higher costs of inputs from suppliers who fear the company might not pay its bills next month, and the loss of customers who desire a long-term relationship with the firm. These costs prevent firms from maintaining exceptionally high levels of debt. A fourth factor limiting the use of debt is desire for control by current shareholders. MM theory in a 1976 article, noted differences between the firm that is 100 percent manager owned and one where the equity is owned partially by managers and partially by outsiders. The managers should run the firm to maximize its value. But managers may not implement their decisions because of the control of shareholders. On the other hand, debtors cannot control the firms management that is advantaged. Availability of assets for pledge also limits the use of debt. In order to ensure its security of loan, bank always acquires pledges from the company and this kind of pledges should be easy to be realized. If the company lack of assets that can be used as pledges, it must be difficult to raise money as debt. When a company starts to borrow, the advantages always go with the disadvantages. In order to minimize the cost of capital and maximize the earning, company should consider above-mentioned factors carefully to gain benefits from financial leverage. c) Dividend Payment Policies 1. residual dividend pay dividend only if more earnings available than are needed to support optimal capital budget NTUC Income Shares 1999 ; 2000 6% each year 2001 5% 2002 3.5% 2003 5% Its dividend policy is to reward shareholders for investment earnings on their capital, which is used to back our business. Dividends are declared on all shares held during the financial year and are based on their business performance during the year. It is declared at the Annual General Meeting and is credited directly to your bank account. Dividend is payable in full on shares held for a duration of 12 calendar months during the financial year and on a pro-rated basis on shares held for less than 12 months. http://www.google.com.sg/search?q=cache:XweOBesthMcJ:incnet.income.com.sg/uishare/main.aspx+dividend+policy;hl=en 2. stable growth rate set target growth rate for dividend and strives to increase dividend by that amount every year ACOM CO., LTD. (Tokyo Stock Exchange) ACOMs dividend policy is to provide shareholders with stable dividend growth. Dividends for the fiscal year under review included an amount equivalent to the commemorative dividends paid last year in the interim and year-end dividends as well as a à ¯Ã‚ ¿Ã‚ ½5.00 per share increase in the term-end dividend, to à ¯Ã‚ ¿Ã‚ ½22.50. Consequently, the total year dividend for fiscal 1998 was à ¯Ã‚ ¿Ã‚ ½40.00 per share, a rise of à ¯Ã‚ ¿Ã‚ ½5.00 from the previous year. This represents a payout ratio of 13.3% and a 2.0% dividend on equity. www.c-direct.ne.jp/english/ divide/10108572/8572_98/8572e_02.pdf 3. Constant payout pay certain amount of earnings as dividends (or pay a constant $ amount each year). Neptune Orient Lines (NOL) NOL is a global transportation company, with core businesses involved in container transportation and supply chain management. NOL intends to maintain an annual dividend of 8 Singapore cents per share net, or a full year dividend payout of 20% of net profits, whichever is higher. In line with this policy, the Board of Directors has declared an interim dividend of 7 Singapore cents per share net (8.75 cents gross). This dividend is issued out of existing Section 44 tax credits and is payable on 30 August 2004. http://www.nol.com.sg/newsroom/04news/040727.html 4. low regular dividend plus extra pay a low regular dividend and an extra at the end of the year (depending on the earnings performance that year) SINGAPORE Exchange (SGX) July 30, 2004 SGX proposed a final dividend of 4.075 cents per share and a special dividend of 6.5 cents, bringing the total payout for FY04 to 13.5 cents per share. It paid 40.5 cents per share in dividends last year, including a special 34-cent dividend from the liquidation of assets. http://business-times.asia1.com/story/0,4567,124036,00.html