Proportion of insider ownership

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Reference no: EM131190002

Assume all things are held constant other than the item in question, for each of the companies below:

  • A company with a large proportion of insider ownership all of whom are high-income individuals.
  • A growth company with an abundance of good investment opportunities.
  • A company experiencing ordinary growth that has high liquidity and much unused borrowing capacity.
  • A dividend paying company that experiences an unexpected drop in earnings from a trend.
  • A company with volatile earnings and high business risk.

Required:

Explain whether or not you would expect each company to have a medium/high or a low dividend payment ratio and the reasons for such categorization.

Reference no: EM131190002

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