- This topic has 1 reply, 2 voices, and was last updated 6 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- The topic ‘dividendc cover’ is closed to new replies.
OpenTuition recommends the new interactive BPP books for June 2024 exams, Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › dividendc cover
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 ?
Your 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.