is the formula profit after tax less preference dividend divide by dividend paid correct
?
and what does dividened cover mean ? is higher better or lower better ?
if in 2010 the div cover is 2.3 and in 2015 it is 2.9 ? what do these numbers indicate
and what does dividend yield mean ?
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dividendc cover
8y ago#1Your formula is correct.
Higher dividend cover means more retention and therefore potential for higher future growth. Whether higher is better or not depends on what the shareholders are wanting - high dividends, but little growth; or higher capital growth but lower dividends.
For a full explanation of this, watch the relevant Paper F8 lectures.
Dividend yield is dividend/market value.
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