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  • Tutorial 2

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    JIA ERN GOH
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    The document shows the equivalent annual growth rates for dividend per share, earnings per share, and share price for a company (UUL Co) compared to industry averages over a 5 year period from 20X2 to 20X6. While UUL Co's dividend per share growth of 14.03% was above the industry average of 11%, its earnings per share growth of 6.92% and share price growth of 14.04% were below the industry averages of 12% and 18% respectively. The conclusion is that the chairman's statement that the company outperformed the industry is not entirely true since only dividends growth was above average, while earnings and share price growth were below average.

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    The document shows the equivalent annual growth rates for dividend per share, earnings per share, and share price for a company (UUL Co) compared to industry averages over a 5 year period from 20X2 to 20X6. While UUL Co's dividend per share growth of 14.03% was above the industry average of 11%, its earnings per share growth of 6.92% and share price growth of 14.04% were below the industry averages of 12% and 18% respectively. The conclusion is that the chairman's statement that the company outperformed the industry is not entirely true since only dividends growth was above average, while earnings and share price growth were below average.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    7 views2 pages

    Tutorial 2

    Uploaded by

    JIA ERN GOH
    The document shows the equivalent annual growth rates for dividend per share, earnings per share, and share price for a company (UUL Co) compared to industry averages over a 5 year period from 20X2 to 20X6. While UUL Co's dividend per share growth of 14.03% was above the industry average of 11%, its earnings per share growth of 6.92% and share price growth of 14.04% were below the industry averages of 12% and 18% respectively. The conclusion is that the chairman's statement that the company outperformed the industry is not entirely true since only dividends growth was above average, while earnings and share price growth were below average.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    (a) Equivalent Annual Growth (EAG)

    20X2 20X6 Industry Average


    Dividend Per Share 4.2 7.1
    (i) EAG For dividend per share 14.03% 11%

    Earnings Per Share 31.6 41.3


    (ii) EAG For earnings per share 6.92% 12%

    Price Earnings Ratio (Price/Earning) 17 22


    Share Price = PE Ratio X Earnings $5.37 $9.09
    (iii) EAG For Share Price 14.04% 18%

    Comments
    In view of the annual growth of other water industry for the last 5 years, the dividends per share of UUL Co is 14.03% which is
    a good sign showed that UUL Co are able to distribute more dividends to the shareholders. This div growth may not be sustainable
    because it is higher than EPS growth.

    While for earning per shares, there is a difference of 5.08% which indicates UUL Co is less profitable compared to other water industry.

    The share price growth of UUL Co is 4% slower than other water industry.

    Conclusion:
    No. The chairman statement may not be entirely true.
    Only the divicdend is abouve average while EPS and share price growth were below average

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