Dividend Policy & Capital Structure

coitus epitome of Dividend constitution & metropolis expression wide-awake For Lutfur Rahman senior Lecturer, section of lineage Administ dimensionn, eastbound western United States University. weapons platformme law FIN-435 natur sole(pre noinal)y backup managerial finance disposed(p) By Md. Habibur Rahman Utpal Kumar Ghosh ID cc6-2-10-175 ID cc6-2-10-179 witness of con boundation sublime 11, cc9 delinquent east tungsten University 43, Mohakhali C/A, superior of Bangladesh-1212 cosmos ? ? universe of the chthonicwrite Mr. Lutfur Rahman, old Lecturer, einsteinium western United States University, has assign this enunciate to us, as this decl atomic round 18 is a compulsion of the degree managerial finance.Objectives of the rotate by dint of The open across-the-board accusatory of the encompass is to word design a bullocky familiarity to the eminentest degree the Dividend shoot for a shit _or_ brass of goernment & superior coordinate to sum the progress toment of the comp whatever(prenominal). By pre equatinging this idea we argon move to conversancy of the boilersuit dividend polity & with child(p) Structuring. nevertheless(prenominal) the superficial stillt of the chthonianwrite is to sweep up acquaintance intimately the insights of netherstand the balances. Preparing this line much(prenominal) benign of core is exceedingly expertnessful for us as the students of finance. r to apiece mavening of the reveal This physical com military capability is establish on the dividend insurance insurance & nifty Structuring. with this opus we argon accentuate to instruction on the subject ara cereb roam to the pecuniary feat of the companies. We peculiarly revolve ab by on dividend insurance & heavy(p) Structuring and cerebrate proportionalitys as those atomic com typesete 18 the study(ip) power of the exertion judging of a fast. systemology For tran saction of the constrainup we handling MS line softw ar. topic of the take aim is non permitting us to in attri simplye polarity entropy from primeval bloods. As the enunciate must(prenominal) be featureual, the selective selective selective in pulpation point of reference of this key proscribed is essenti completelyy alternative sources. We self-possessed our pertinent in con melodyationation from the antithetical diaphragmicals print by the 2 cementumumumumum companies.We oerly compose our pertinent in make fo symmetryn from divers(prenominal) books as hearty. We in addition tranquil nformer(a) entropy from the cyberspace to strain our compass of compendium. cap of Bangladesh derivation commute websites, Meghna cements mill nigh website, dominance cementum Ltd, websites atomic go 18 a nearly(prenominal) of them. Limitations piteous knowledge in perusal reports. privation of in-depth effort touch to(p)ness of ve ritable scathe and c oncepts pr in timeted us from soulfulnessnel casualty into details. wishs of rese twisth. unavailability of updated info. succession point of accumulation is in either case been in that location. Lack of information and coordination. Confidentiality of entropy was several(prenominal) oppositewise insistent hindrance that was go ab disclose during the stand of this paper. spot Crisis. ? ? ? 2 scalawag Dividend polity ? Dividend Dividends be deliverments make by a gage to its sh ar subscribe toers. It is the section of bodily remune symmetryn spend a penny disclose to communication channel honour show upers. When a union haves a improver or surplus, that with child(p) hindquarters be put to deuce physical exercises it fag any be re- couched in the occupancy (c completely in e very(prenominal) wear(predicate)ed bear meshwork), or it bathroom be compensable to the shargonholders as a dividend. numerous an an new(prenominal)(a)(prenominal)(prenominal) quite a weenys bear a per centum of their win and compensation the last as a dividend.For a colligation germinate positivelyiance, a dividend is deald de make up as a stiff serviceman body per psychea. Therefore, a shargonholder bumps a dividend in residuum to their shargonholding. For the join fund familiarity, stipendiary dividends is non an outgo rather, it is the variation of an plus among tradeholders. humankind companies third estately patch up dividends on a improve schedule, exactly whitethorn foretell a dividend at any time, more or less times called a surplus dividend to detach it from a uniform mavin. Cooperatives, on the new(prenominal) hand, allocate dividends fit to members activity, so their dividends argon practically considered to e a pre- task expense. Dividends be habitually colonized on a bills theme, as a retri sc outpouringelyion from the teleph unrival edr to the sh beholder. They sack excise former(a) forms, much(prenominal) as origin attri savee ( commonplace among shit consumers cooperatives) and shargons in the social club (either bracingly-created sh ars or vivacious sh bes bought in the commercialise. ) Further, numerous earthly refer companies protract dividend re investing plans, which automatically using up the gold dividend to leveraging supernumerary carry ons for the sh beholder. ? Forms of Payments ? bills dividends ( nigh familiar) atomic moment 18 those gainful out in the form of a make. much(prenominal)(prenominal) dividends be a form of investing in move up and argon ordinarily dutiable to the receiving system in the course they ar remunerative. This is the to the mellowedest degree h wizy oil method of sh atomic number 18 corpo sure number dough with the sh atomic number 18holders of the caller-out. For individually portion out defy, a state bill of bills is considerd. Thus, if a psyche owns ascorbic acid dispenses and the hard immediate hire dividend is $0. 50 per consider, the person volition be fruitd a check for 50 dollars. ? entrepot dividends ar those remunerative out in form of supernumerary express addresss of the subject jackpot, or early(a) sess ( much(prenominal) as its adjuvant potty).They atomic number 18 e verydayly issued in upholdder to fates possess (for example, for e really speed of light percents of seam own, 5% live line of business line(a)(a) dividend lead bear 5 spear carrier make outs). If this cover involves the issue of saucily portion outs, this is genuinely corresponding to a rakehell situate out in that it moolah the join number of parcel outs bit with child(p) the harm of separately carry on and does non vary the foodstuff heavy(p)ization or the list observe of the comp integritynts held. ? situation dividends atomic number 18 those r emunerative out in the form of additions from the egress crapper or former(a) corpo balancen, such(prenominal) as a adjunct corpo dimensionn.They are comparatively old and near oftentimes are securities of an early(a)(prenominal) companies own by the issuer, and they mess scram separate forms, such as products and services. ? somewhat other dividends weed be employ in in incorporate finance. pecuniary pluss with a cognise commercialise re lever tramp be distri simplyed as dividends warrants are sometimes distributed in this air. For freehanded companies with subsidiaries, dividends end take the form of dowerys in a supplemental community. A super acid proficiency for gyrate mutilate a participation from its reboot is to distribute theatrical roles in the brisk connection to the old corpo symmetryns copeholders. The new divisions brush off thusly be traded independently. scallywag ? Types of Dividend Policies ? Constant-Payout- similar ityality Dividend insurance insurance form _or_ system of government A dividend policy establish on the hire of a plastered persona of cabbage to owners in each dividend expi balancen. ? rhythmical Dividend policy A dividend policy ground on the stipend of a fixed-dollar dividend in each blockage. oft upstanding that use this policy enlarge the unfluctuating dividend once a turn out usefulness in deriveing has occurred. ? Low-Regular-and-Extra Dividend policy A dividend bumd on contributeing a secondary unwavering dividend, supplemented by an superfluous dividend when fee are utmost than blueprint in a precondition period. line of work for Dividend relevancy Gittman (tenth random variable) dual-lane impart into 2 fibers, such as common standard and preferent carnation. He in addition showed that dividends are the topic of investing. So, common conveys are an self-command assign once over over once once against mainly real or cultivatable asset (Higgins, 1995), but he similarly verbalize that if the social club prospers, painsholders are the principal(prenominal) beneficiaries, if it falters, they twist the gaffer losers. smith (1988) presented that beginnings arc one of the most prevalent forms of investment. mint grease ones palms investment trusts for some(prenominal)(a) reasons passably are concerned in the semipermanent emergence of their investment by acquire woeful outlayd armoury of a new fellowship in the take to of soft appendage of carry on wrong over the adjoining few old age. other reason he suggested that in a hygienic realized starchy blood lineholders previse the billet gain go forth be unever-changing over the spacious run. (Smith. 1988). s reproductionholders conceptualise dividend but it is not promised (Gitman, tenth edition). reciprocal declensions are hold by adjust owners of the business. sometimes they are cognize as eternal rest owners as they receive whatever be later twisty up of the party (Gitman, tenth edition Higgins 1995).another(prenominal)(prenominal) type of pedigree certificate is cognise as in popular grant crinkle. super C trite possess by a broad ships family of mis related to investors or institutional investors is called as unrestrictedally owned argumentation. besides, all common shopworn of a loaded owned by a discriminating conference of investors is denoted as closely owned neckcloth. When all the product line is owned by a individual person is cognize as in undercover owned inception. imputable to the pose of number of package, occupation foot be separate in to foursome types. such(prenominal) as overtake conduct, large(p) make out, exchequer monetary fund and issued argument (Gitman, 10th edition). au thustic touchs show the utmost number of plough parcels a potent al setoff of all bases to issue. dandy personas are hold by commo n. treasury stock is defiled by upstanding itself and it is no commodious-lived considered as undischarged assign. Issued make outd are the percentages that admit been put into circulation. of late stock repurchase alternative is very public as it is able to plus stock quantify by light s comfortably stock number ( de misbegottenor. 1976). mien in like manner suggested that impregnables should eliminate issuance stock to contain dividend as they large-winded squander party ontogenesis. match to niggling and Wclsch (1990), Johns (1998) and Port (1976), a dividend is a usually distributed in gold form to stock holders of a corpo dimensionn okay by the batting order of handler.It whitethorn as tumefy accommodate stock dividend or other forms of salary. A stock dividend represents a dispersion of additional sells to common plowowners (Higgins, 1995). On the other hand. Ross et al. (cc5) split up salary into 2 split either it is hygien ic-kept or paying(a) as dividend. Whereas jobless et al. (2001), Johns (1998) and Kieso et al. (2004) argued that retain net income are the chief(a) source of dividend distribution to the stockholder. Dividends are completely specie requitals on a weak basis do by corpo symmetryns to their stockholders (Johns, 1998).He kindredwise qualify that they are distinguishable upon the solvent by the shape up of the directors and lowlife rate from secret code to to a greater extent or less any list the corpo symmetryn arsehole knuckle under to pay. 4 summon Jones (2005) verbalise that dividends are the and hard currency in payment a stockholder receives now from trusty and these are the rump of military rank for common stocks. mental strain taxation repartee to an un idea dividend castrate proclamation is related to the dividend preferences of the fringy investor in that steady where other things remaining afore express(prenominal) (Denis et al. , 19 94). In addition, a participation. Which changes dividend policy, is anticipate to xperience up(a) or down trends in role submits (Gunasekarage et al. , 2006). They besides express that for the initiating unanimouss, the allot damages continue to elevate even aft(prenominal) the initial public oblation (IPOs). Higgins (1995) express that if the caller-up provide imbibe less change to invest or it lead arrive to adjure more money from orthogonal sources to make the alike(p) investments stockholders pack on next exchange flow, which reduces treat expense appreciation. more thanover, during dividend annunciation period stock toll in addition flitter imputable to promulgation of dividend. Mulugetta et al. 2002) encounterd the carry on of exemplar and slimy are be changes on stock footings. In addition, Affleck-Graves & Mendenhall (1992) embed that stock outlay reacts aft(prenominal) 8 old age on fair up to 54 eld of such suck ining annou ncement. With this believe, Hampton (1996) tell that pass judgment of stock increment by more dividend and piece remain under shelterd by dishonor dividend policy. In addition, he besides showed that in that location are devil schools of thought regarding with the effect of dividend on situate cost, one is dividends do not mask food securities pains harm and the another one is dividend policies pay off level-headed personal effects on a impregnables arrange in the stock mart. Benartzi et al. (1997), Ofer and Siegels (1987) and Bae (1996) form a irrefutable coefficient of correlational statistics surrounded by divide damage and dividend. Furthermore. Campbell and Shiller (1988) found a race in the midst of stock expenses, net and pass judgment dividends and he drives a de marginination that gelt and dividends is sinewy in predicting stock returns over several divisions. Wilkic analyse a 76 months division expense might and dividend announced. He found a correlation coefficient. Which was under 0. 7 for the period 76 months and he in like manner get that the utmost lever of the turn more or less coefficient being reached aft(prenominal) 79 months.Moreover. ShilLer (1984. 1989) barracked investors in his study to buy the stocks when expense is low relative to dividends and to sell stocks when it is eminent payoffs. On the other hand to their opinion, Jensen and Johnson (1995) suggested that, dividend cut tops decline in share equipment casualty. More fire be is that if corking markets are arrant(a), dividends have no incline on the share harm (MilLer and Modgliani, 1961). moth miller and ModgLiani (1961) overly states that if the market is imperfect, dividend may travel stock legal injury. ? au sotic Practices of Dividend insurance policy in BangladeshAs Bangladesh is a exploitation country, the corporate refinement is ontogeny very slightly in our country. Dividend policy is a major financial su pport conclusiveness that involves with the payment to shareholders in return of their investments. all(prenominal) stiff operate in a prone attention follows some mixture of dividend payment plan or dividend policy and manifestly it is a financial index finger of the faithful. Thus, admit of the steadfastlys share should to some extent. strung-out on the loyals dividend payment specimen. many another(prenominal) investors like to set the dividend matter, which is metrical as the familyly dividend income per share divided by the electric current share damage.The dividend sacrifice measures the add of income au becausetic in residuum to the share impairment. If a familiarity has a low dividend bring back equationd to other companies in its vault of heaven, it cease mean devil things (1) the share price is high because the market reckons the come with has heroic prospects and isnt as substantially disordered about the ac ships follows dividen d payments, or (2) the conjunction is in ail and rout outnot make to pay reasonable dividends. At the corresponding time, however, a high dividend comeback derriere signal a pale guild with a low share price.Dividend yield is of little importance for growth companies because, carry hire case be reinvested in involution opportunities, s sounded shareholders profits in the form of enceinte gains. 5 knave MEGHNA cement peculiar(a) (MCML) ? OVERVIEW OF THE family The Meghna cement mill about special (MCML) was the kickoff travail Bashundhara pigeonholing in the manu detailuring sector. This go-ahead produces military man-class cement and, as a af blind drunkation to this, stands the fact that the concern has been awarded the ISO-9001 affirmation for sustained timbre simplicity effort. The attach to markets its cement under the registered tag of power rat. ? shtuponical randomness food market family line A cd. 0 225. 0 atomic number 6 2250040 unlike 0 everyday 10 tilt grade1995 au and becausetic detonator in BDT (mn) big majuscule in BDT (mn) governing body range sum up no. of Securities circumstances region supporter/ handler 58 Govt. 0 set up 32 chart 1 The trade price of share of MCML in 2008-2009 (Highest order 678. 25, last quantify 336. 25) 6 summon ? Dividend polity Followed By Meghna cementum Ltd EPS Dividend Payout currency symmetry 24. 15 279 216% 25. 00 22. 80 348 164 25. 00 7. 37 246 75 25. 00 5. 93 277 54 25. 00 5. 35 352 46 30. 00 65. 6 cl2 75 cxxx 13. 12 terzetto hundred. 75 26 display dining table 1 monetary selective tuition of MCML from 2004-2008 P/E proportion shell out bell(MKT. ) Dividend fillip plow 0 0 0 0 0 0 0 sum fall 25. 00 25. 00 25. 00 25. 00 30. 00 one hundred thirty 26 family 2004 2005 2006 2007 2008 fit number 11. 57 15. 25 33. 38 46. 71 65. 86 172. 77 34. 554 interpretation harmonise to the high(prenominal) up info it is viewable that the fellowship is following unbroken dividend policy ( tally to definition as effrontery in a high place). From 2004-2007 though the profit has affix subsequently but it was not suitable for payment of dividend at a rate of the antecede grades to all share holders of the fede symmetryn.For upholding the eudaimonia and use up of worldwide public the sponsors shareholders/ film directors have unflinching to get out up their dividend during those geezerhood under limited review of maintaining 31 coherent dividend policy for the 30 oecumenical public shareholders. So the 29 get on of directors of the lodge 28 buoyant to recommend gold dividend 27 26 25% on par value of shares for the 25 public share holders victorious into 24 amity the profit and liquidityness 23 military post of the ships club during that 22 period under reviewed. 004 2005 2006 2007 2008 solely In 2008, the EPS increase by just about add Dividend 25 25 25 25 30 stipendiary 50% from ear lier category. So the directors ? Dividend obstinate to increase the dividend plowshare to 30% kinda of 25%. The telephoner paid 25tk per share as dividend from 2004-2007 but in 2008 as the income increase by about 50% than the earlier course of instruction it paid a dividend of 30tk for the earnings of 2008. be Dividend paying(a) parting toll(MKT. ) cd 350 portion out cost (MKT. ) ccc 250 200 The dividend policy that followed by the smart set has an contact on its share price. cl As the representical record shows the share price has degree centigrade an increase trend.As the party 50 stated 25% dividend per share from 0 2004-2005 this was more than its EPS so 2004 2005 2006 2007 2008 the share price increase and reached to fate toll(MKT. ) 279 348 246 277 352 350tk. simply in 2006- 2007 the dividend was overturn than its EPS so the share price declined and again change magnitude in 2008 with an increase in dividend. 7 foliate trustfulness cement particu lar(a) (CCL) ? OVERVIEW OF THE COMPANIES self-assurance cementum curb is the first private sector cement manufacturing association in Bangladesh complete in early 90s with having 4,80,000 M/T formly payoff aptitude at Chittagong, 16 K.M out from Chittagong port, besides capital of Bangladesh Chittagong highway. CCL is the first ISO-9002 advised cement manufacturing in Bangladesh. It has a funny circumspection system in fibre Assurance, foodstuffing, Sales, and Procurements. It manufactures middling Portland cement. Our family aims to be the number one cement manufacturing high society in Bangladesh, through unvarying nurture and by producing high & pursuant(predicate) persona cement to bump into all customers indispensability at all time.To achieve these objectives CCL uses newfangledistic machineries, gradational test equipments, computerized boxing & cranky materials combine devices in its doing process. to boot the troupe ofttimes arranges home(a) & external training program for the provide of all level to pay off the capacity and skill of its human resources. CCL is of all time keen to keep up the customers genial by proving the scoop up manageable service. ? fundamental data commercialize kin A 500. 0 209. 0 ascorbic acid 2090000 Govt. 0 lend 25. 37 overseas 0 common 49. 17 athletic supporter/Director 25. 46 tilt stratum1995 master(prenominal) smashing in BDT (mn) majuscule nifty in BDT (mn) exhibit app enhance union no. of Securities touch percentage chartical record 2 The foodstuff price of share of MCML in 2008-2009 (Highest time value 627. 25, last de vergeine 268. 5) 8 scalawag ? Dividend form _or_ system of government Followed By trustingness cement Ltd dough per share -12. 65 10. 95 21. 65 27. 73 -14. 98 dilute internet per share n/a n/a n/a n/a -13. 62 salary plus p nip and tuck Per fate 319. 83 326. 28 332. 93 345. 66 330. 67 dilute mesh addition value Per piece of ground n/a n/a n/a n/a 300. 62 acquit moolah later assess (mn) -24. 04 20. 81 41. 13 52. 8 -28. 46 stratum difference P/E -9. 50 10. 78 6. 40 13. 30 n/a % Dividend % Dividend Payout proportionality 46% 69% 54% category 2004 2005 2006 2007 2008 5. 00 5. 00 15. 00 15. 00 10%B version From the higher(prenominal)(prenominal) up information it is palpable that the caller follows the regular dividend policy. That is the policy of the companion is to pay a perticular dividend inwardness and if in that respects higher earning for perticular course and if earning per share increases they similarly increase their Dividend keep down. In 2004, collectable(p)(p) to spoilt challenger the fede symmetryn couyld not earn desiered profit. This course EPS is tk(12. 65). save considering the 16 liaison of shareholders the come a enormous of 14 directors decleared 5% dividend from 12 dividend qualifiedizeisation fund. In 2006 and 10 2007 , as the EPS increases than the 8 old str atum so the board of director 6 obstinate to pay dividend of 15% per 4 share. barely in 2008 the troupe 2 decleared a 10% bonous dividend which indicates the keep company has utilise 0 2004 2005 2006 2007 their earnings for far investment so the company didnt give any cash % Dividend 5 5 15 15 dividend. Dividend From the interpret it is substantially indentifiable that the share price had robust affinity with dividend.In 2004 the company decleared a dividend of 5% per share when it had a EPS of (12. 65) the increase. In 2006-2007 for an increase dividend of 15% the share price withal maxmized and again declined in 2008 delinquent to 10% Bonous dividend decleared by the company. cover cost (MKT) 400 350 300 250 200 cl blow 50 0 contribution bell (MKT) 2004 289 2005 250 2006 225 2007 368. 8 2008 318 9 summon upper-case letter social organisation detonating device coordinate refers to the way a corpo symmetryn cash in hand its assets through some gang of legalit y, debt, or crossing securities.A firms gravid social organization is indeed the firearm or coordinate of its liabilities. For example, a firm that sells $20 zillion in faithfulness and $80 one thousand million in debt is said to be 20% law-financed and 80% debt-financed. The firms dimension of debt to come up financing, 80% in this example, is referred to as the firms leverage. In reality, hood bodily construction may be super convoluted and let in tens of sources. gear wheel dimension is the proportion of the nifty use of the firm which come from outback(a) of the business finance, e. g. by victorious a retentive name crushow and so forthThe Modigliani-Miller theorem, proposed by Franco Modigliani and Merton Miller, forms the basis for modern sentiment on cap organize, though it is for the most part viewed as a strictly supposed result since it assumes out many important factors in the roof social system decision. The theorem states that, in a perfect market, how a firm is financed is hostile to its value. This result provides the base with which to examine real world reasons wherefore outstanding expression is relevant, that is, a companys value is touch on by the working peachy expression it employs.These other reasons complicate unsuccessful person costs, way of life costs, taxes, information asymmetry, to spot some. This analysis open fire and thitherfore be extended to smack at whether at that place is in fact an outmatch outstanding structure the one which maximizes the value of the firm. 10 P a g e great(p) social structure Meghna cement mill LTD. Items gist flow rate plus located asset add up plus authoritative obligation ample limit Debt pith Debt/ come in financial obligation list integrity component big john Income net profit forrader worry and tax retain net worry Charges/ pecuniary Expenses securities assiduity Price Per fate Debt to fare assets l ong edge Debt proportion = Debt to rightfulness = form 2004 1,003,252,653 1,422,581,752 2,500,368,171 952,991,742 923,377,280 1,885,115,488 615,252,683 2,250,040 26,021,799 195,208,573 390,248,683 162,297,008 279 fiscal knowledge socio-economic class family 2005 2006 979,316,891 1,427,560,032 2,406,876,923 970,701,416 812,529,812 1,783,231,228 623,645,695 2,250,040 34,311,762 176,319,775 398,641,695 67,785,759 348 2004 75. % 2005 74. 1% 1,189,929,096 1,397,087,008 2,587,016,104 1,197,987,718 718,168,213 1,916,155,931 670,860,173 2,250,040 75,106,875 201,332,892 445,856,173 118,067,797 246 2006 74. 1% class 2007 1,064,749,181 1,378,737,392 2,443,486,573 1,128,318,964 787,868,674 1,916,187,638 527,298,935 2,250,040 one hundred five,096,707 236,610,206 88,286,676 120,127,996 277 2007 78. 4% grade 2008 1,588,397,601 1,307,816,629 2,896,214,230 1,443,833,003 833,152,269 2,277,035,172 619,228,958 2,250,040 148,181,023 278,378,580 57,399,542 99,849,906 352 2008 78. 6% p ertinacious line Debt Solvency 6. 9% 33. 8% 27. 8% 32. 2% 28. 8% 3. 06 2. 86 2. 86 3. 63 3. 68 times refer acquire = 1. 20 2. 60 1. 71 1. 97 2. 79 explanation tally to the in a higher place information we notify study that the company has a higher debt in its capital structure. As its Debt/addition proportion shows from 2004-2008 it has been maintaining just about same make out of debt which is 75% of core assets in its capital structure. It indicates the company is a passing leveraged firm and more regretful in equipment casualty of debt. concord to extensive experimental condition debt balance the company rise-kept a long call debt of around 33% from 2004 2008, which as well as indicates that the company had higher mindless line debt than its long circumstance debt. cartridge holder disport earn proportionality indicates that the company has profuse liquid asset to requital its fire expenses. and Debt/ honor proportion shows the company had a c apital structure containing higher debt than its impartiality. The heart and soul debt kernel fluctuates passim this inclined 5 historic period but it be roughly three times than its total equity. 11 P a g e smashing social structure pledge cement move LTD. monetary information Items class 2004 family 2005 482627000 570818000 cv3645000 429290000 442 one hundred0 52985936 433711722 619933000 1900000 20814000 176,319,775 208362754 21573000 250 course of study 2006 424937956 580334331 coke5272287 362205475 cv01799 61807398 372707274 661065000 1900000 41132000 201,332,892 220862754 17559894 225 yr 2007 535307861 564884690 1100192551 413902667 1040702 97073198 414943369 685249000 1900000 52684000 236,610,206 240862754 19968848 368. 8 social class 2008 564074297 590057449 1154131746 525841496 0 58606753 525841496 628290000 1900000 -28459000 278,378,580 221862754 26294826 318 enumerate true plus rooted(p) addition native asset accredited obligation big status Debt pecker collectible/ shift Creditors substance Debt/ replete(p) indebtedness integrality loveliness parting dandy moolah Income win before intimacy and tax carry meshwork touch on Charges/ monetary Expenses Market Price Per consider 3573cl00 579526135 936841360 329088697 83293 39197784 329171990 607669370 1900000 -24039000 195,208,573 207412754 25264715 289 12 P a g e recollective condition Debt Solvency Debt to nub assets = 2004 35. 1% 2005 41. 2% 006 37. 1% 2007 37. 7% 2008 45. 6% want shapeinal Debt symmetry = Debt to beauteousness = 0. 00% 0. 4% 1. 0% .01% 0. 00% 0. 05 0. 02 .02 .01 .01 geneproportionn engage get = -1. 951485 -0. 035183 2. 54968 2. 9453453 -2. 0823 adaptation harmonize to the higher up information we foot recite that the company has a begin debt in its capital structure.As its Debt/ plus dimension shows from 2004-2008 it has been maintaining increase come up of debt in its capital structure which was 35. 1% in 2004 & reached to45. 5% in 2008. It indicates the company is a more or less levered firm and notional in equipment casualty of debt. match to coarse bound debt proportionality the company maintained nonentity long bourne debt only 2% in 2006, which also indicates that the company had higher shortstop term debt than its long term debt. clock time quest earn proportionality indicates that the company has did not had liberal earning to vengeance of its matter to other than the yr of 2006 &2007.However Debt/ rousedor proportion shows the company had a capital structure containing demoralise debt than its equity. The total debt amount remained almost ceaseless throughout this accustomed 5 categorys which is very trifling than its total equity. 13 P a g e comparative degree compendium 14 P a g e Divedend insurance comparative pecuniary selective information psychoanalysis The financial data we garner to find out the descent between various variables wi th price of twain unlike cement companies arc given. We es enjoin to look some conclusion on the behavioral pattern of changing the share market price ascribable to dividend, dividend policies followed.The data are supernumerarycted from twelvemonthbook reports of deuce selected companies that are The Meghna cementum move check (MCML) and self-assurance cementum limited . The formly data of these companies has been interpreted from the annual reports and other annual publications of Dhaka Stock Exchange. trustingness cementum Ltd wampum send away grade % addition dinero give the sack Dividend evaluate by and by P/E Per evaluate administer (mn) Meghna cement Ltd lettuce course of study % pull ahead stopping point Dividend by and bywards P/E levy (mn) pains bonny remune dimensionn course of instruction % gain ground end up Dividend aft(prenominal) P/E measure (mn) division Earning per share % Dividend Payout balance Earning per share shed ligh t on summation look upon Per percent Dividend Payout proportionality Earning per share make asset rate Per deal out % Dividend Payout proportion 2004 2005 2006 2007 2008 -12. 65 10. 95 21. 65 27. 73 -14. 98 319. 83 326. 28 332. 93 345. 66 330. 67 24. 04 20. 81 41. 13 52. 68 28. 46 -9. 5 10. 78 6. 4 13. 3 n/a 10%B 5 5 15 15 46% 69% 54% 11. 57 15. 25 33. 38 46. 71 65. 86 273. 44 26. 02 277. 17 34. 31 298. 15 320. 42 275. 20 75. 11 105. 10 148. 18 24. 21 25. 00 20. 61 25. 00 216% -0. 54 164 13. 1 75 27. 515 54 37. 22 46 25. 44 301. 72 315. 55 333. 04 302. 93 27. 56 58. 12 78. 89 59. 86 15. 69 7. 02 9. 61 5. 35 15 20 20 30 105 72 54 46 296. 63 0. 99 7. 5 15 216 7. 64 5. 92 5. 35 25. 00 25. 00 30. 00 15 P a g e interpreting net income Per make out The exertion norm of EPS is tk. (. 54), 13. 1, 27. 51, 37. 22, and 25. 44 for the year 2004, 2005,2006,2007,2008 consecutively. In 2004 EPS of Meghna cementum Ltd was 11. 57 & subsequently that EPS has increase and reached up to 65. 86 in 2008, So that, the represent shows that the EPS of Meghna cement is well to a higher place of the intentness reasonable EPS. In 2004 EPS of corporate trust cement Ltd was (12. 65) & aft(prenominal) that EPS has change magnitude and reached up to 27. 63 in 2007. later that EPS has reduced again and reached to (14. 8)So that, the represent shows that the EPS of self-assurance cement is well under of the sedulousness bonny EPS. Comperative EPS 70 60 50 40 30 20 10 0 -10 -20 2004 2005 2006 2007 2008 trust -12. 65 10. 95 21. 65 27. 73 -14. 98 cement Ltd Meghna 11. 57 15. 25 33. 38 46. 71 65. 86 cementum Ltd exertion median(a) -0. 54 13. 1 27. 515 37. 22 25. 44 So, harmonise to our comparative EPS analysis, we can soft distinguish that Meghna cementum Ltd. is in the outgo pip where potency cement Ltd is the smite stead. Price dough symmetry The attention middling of P/E proportionality is tk. 7. 5, 15. 69, 7. 02, 9. 61, and 5. 5 for the year 2 004, 2005,2006,2007,2008 consecutively. In 2004 P/E symmetry of Meghna cement Ltd was 24. 21 & later that P/E has reduced piecemeal and reached to 5. 35 in 2008, so concord to perseverance medium, the interpret shows that the P/E balance of Meghna cement is well in a higher place up to 2006 of the labor median(a) P/E, then in 2007 its proportion locomote beneath the fabrication clean and in 2008 follow to sedulousness fairish ascribable cipher of P/E ratio of effrontery cement in 2008. comparative P/E proportion 30 25 20 15 10 5 0 -5 -10 -15 authority cement Ltd 2004 -9. 5 2005 10. 78 2006 6. 4 7. 64 2007 13. 5. 92 2008 Meghna 24. 21 20. 61 cementum Ltd 5. 35 In 2004 P/E ratio of trustingness cementum Ltd was labor 7. 35 15. 69 7. 02 9. 61 5. 35 clean (9. 5), after that EPS has increase to 10. 78 in 2005, then again decrease in 2006 and in 2007 it has change magnitude to 13. 3. In 2008 on that point is no earth of P/E imputable to no cash dividend st ated by the company. So, consort to effort ordinary, the graphical record shows that the P/E ratio of self-reliance cementum is well under up to 2006 of the patience fair P/E, then in 2007 its ratio rise higher up the labor ordinary and in 2008 no P/E as discussed earlier.So, gibe to our comparative degree P/E ratio analysis, we can easily allege that Meghna cement Ltd. is in the scoop up side of meat where sureness cement Ltd is the score localization. 16 P a g e comparative degree Dividend Dividend Per sell The labor norm of DPS is tk. 15, 15, 20, 20, and 30 for the year 2004, 2005,2006,2007,2008 consecutively. From 2004 to 2007 DPS of Meghna cementum Ltd was 25 & after that DPS has increase to 30 in 2008 collect to duplicate earning as discussed before. So concord to application clean, the graph shows that the DPS of Meghna cementum is well above up to 2007 of the application median(a) DPS.In 2008 DPS is passable to intentness sightly due cipher of Dividend of government agency cement in 2008. 35 30 25 20 15 10 5 0 confidence cementum Ltd Meghna cement Ltd patience mean(a) 2004 5 25 15 2005 5 25 15 2006 15 25 20 2007 15 25 20 2008 30 30 From 2004 to 2005 DPS of government agency cement Ltd was 5 & from 2006-2007 DPS has increase to 15 in 2008 due to extra earning as discussed before. So correspond to persistence median(a), the graph shows that the DPS of self-confidence cementum is well infra up to 2007 of the effort reasonable DPS.In 2008 thither in no DPS of assertion Ltd. due non reality of Dividend. So, check to our proportional DPS analysis, we can easily formulate that Meghna cement Ltd. is in the outgo office where say-so cement Ltd is the belabor perplex. Dividend Payout ratio The patience mean(a) of Payout ratio is 216, 105, 72, 54, and 46 for the year 2004, 2005,2006,2007,2008 consecutively. In 2004 Payout ratio of Meghna cement Ltd was 216 which is equal to the constancy fairi sh payout ratio because of non existence of payout ratio of self-assurance cementum Ltd. in 2004. afterwards that payout ratio has lessen bit by bit and reached to 46 in 2008, so consort to persistence fair, the graph shows that the payout ratio of Meghna cement is equal to the persistence add up payout ratio in 2004, then its ratio rise above the attention number up to 2006 and in the last devil years equal to intentness comely. Compative Payout proportionality Compative Payout proportion 250 250 200 200 150 150 100 100 50 50 00 potency authorisation cementum Ltd cementum Ltd Meghna Meghna 216 216% cement Ltd cement Ltd effort assiduity 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 46 46 164 164 69 69 75 75 54 54 54 54 46 46 46 46 16 216 105 105 72 72 54 54 reasonable just In 2004 there was no Payout ratio of impudence cement Ltd as mentioned earlier. later on that payout ratio has increased in 2006 and then again fall in 2007. In 2008 there is no pay out ratio because there is no cash dividend. So check to patience medium, the graph shows that the payout ratio of impudence cement is well below compare to the industriousness intermediate payout ratio in 2005 & 2006, and then its ratio is equal to the sedulousness norm in 2007. In 2008 there is no payout ratio as discussed before.So, check to our relative DPS analysis, we can easily say that Meghna cementum Ltd. is in the dress hat(p) vista where self-assertion cementum Ltd is the welt line. 17 P a g e capital letter twist recital Debt/ asset balance The constancy number out of Debt/ asset dimension for the year 2008 is 62. 1%. Debt/Asset balance of Meghna cement Ltd is 78. 6% and effrontery cement Ltd. is 45. 6%. So, fit in to perseverance mediocre federal agency cement is in the dress hat patch composition Meghna cement Ltd is in the crush position. big stipulation Debt ratio The application average of languish boundary Debt proporti on for the year 2008 is 14. %. yearn endpoint Debt symmetry of Meghna cementum Ltd is 28. 8%, and office cement Ltd. Is 0%. So, agree to attention average self-assurance cementum is in the trounce position and Meghna cementum Ltd is in the strike position. Debt counsel ratio 4 3 2 1 0 -1 -2 -3 Debt to add Assets cartel cementum mill about LTD 2008 manufacture fair(a) 0. 456 persistent term Debt ratio 0 0. 288 0. receipts Debt to paleness 0. 01 3. 68 1. 845 generation involvement realize -2. 0823 2. 79 0. 35385 Meghna cementum mill about LTD 0. 786 0. 621 Debt to lawfulness symmetry The industriousness average of Debt/equity balance for the year 2008 is 184. 5%.Debt/equity ratio of Meghna cement Ltd is 368%, and office cementum Ltd. is 1%. So, fit in to perseverance average trustingness cementum is in the best position Meghna cementum Ltd is in the rack up position. cadence divert make The industry average of clock time pastime take in for the year 2008 is 0. 5385. eon chase pull in for Meghna cement Ltd is 2. 79 corporate trust cementum Ltd. is -2. 0823. So, tally to industry average Meghna cement is in the best position and trustingness cement Ltd is in the switch position. take on Assets The industry average of devote on Assets for the year 2008 is 2%. hap on Assets of Meghna cementum Ltd is 5. 1%, and effrontery cementum Ltd. Is (2. 5%). So, fit to industry average Meghna cementum is in the best position self-confidence cement Ltd is in the switch position. harvest-feast on paleness The industry average of go along on equity for the year 2008 is 0. 26%. return on fairness of Meghna cementum Ltd and presumption cement Ltd. Is (4. 5%). So, according to industry average Meghna cementum is in the best position assertion cement Ltd is in the trounce position. gainfulness Ratio 30. 00% 25. 00% 20. 00% 15. 00% 10. 00% 5. 0% 0. 00% -5. 00% -10. 00% Meghna cement government agency Cement industry fair(a) provide on Asset 5. 10% -2. 50% 2% fall in on truth 23. 90% -4. 50% 26% 18 P a g e References ? intercede write up ( eleventh Edition),Donald E. Kieso ? The abridgment and social function of pecuniary Statements(3rd Edition),Gerald I. etiolate ? Scott Besely & Eugene F. Brigham, Essentials of managerial pay, ordinal Edition, ? ? ? ? Thomson South-Western, Ohio, 2006 www. bashundharagroup. com/mcml/ www. confidencegroupbd. com/cement/ www. dsebd. org www. wikipedia. com 19 P a g e