Sign Of Mature Business Case Study: Myer Holdings Ltd
Question1
Myer Holdings Ltd is Australia’s largest departmental store with over 60 stores located in prime locations across the country. It was founded by Sidney Myer in 1900 and headquartered in Docklands, Australia. Its core products include youth fashion, children’s wear, beauty, cosmetics, fragrance, homewares, toys, fashion accessories and general merchandise.
DIVIDEND
Myer Holdings Pay Dividend twice a year-Interim and Final. In 2016 the dividends paid out were .02 for Interim and .03 for Final.
Question2
The formula we use Re=(P1+D1-P0)/P0
Monthly return from January 2016 to December 2016:
The monthly return on JAN 2016: (1.035-1.195)/1.195=-13.389%
The monthly return on FEB 2016: (1.155-1.035)/1.035=11.594%
The …show more content…
The business is stable and is not affected by the turbulences unless some drastic or major happens. This information is valuable to the investors who prefer stability.
No Requirement of Control – Dividend is the only measurement of valuation available to the minority shareholders. While the institutional shareholders can be sure of big stake and influence the dividend payout policies. Minority shareholders have no control over the business but at least they can be sure of receiving dividend and thus value the corporation.
Justification – The primary function of the Dividend Discount Model is simple. Business is a perpetual entity. Investor pays a price today which entitles him to enjoy the benefits of all dividends the corporation pays throughout the lifetime. Analyst believe there is no subjectify to this model and it is crystal clear.
Consistency - Another advantage of DDM is the fact the dividends tend to stay consistency over long period of time. Companies do not set up high dividend expectations because not living up to them would affect the share prices. And the companies pay in cash only which is present with them every
Myer Holdings Ltd is Australia’s largest departmental store with over 60 stores located in prime locations across the country. It was founded by Sidney Myer in 1900 and headquartered in Docklands, Australia. Its core products include youth fashion, children’s wear, beauty, cosmetics, fragrance, homewares, toys, fashion accessories and general merchandise.
DIVIDEND
Myer Holdings Pay Dividend twice a year-Interim and Final. In 2016 the dividends paid out were .02 for Interim and .03 for Final.
Question2
The formula we use Re=(P1+D1-P0)/P0
Monthly return from January 2016 to December 2016:
The monthly return on JAN 2016: (1.035-1.195)/1.195=-13.389%
The monthly return on FEB 2016: (1.155-1.035)/1.035=11.594%
The …show more content…
The business is stable and is not affected by the turbulences unless some drastic or major happens. This information is valuable to the investors who prefer stability.
No Requirement of Control – Dividend is the only measurement of valuation available to the minority shareholders. While the institutional shareholders can be sure of big stake and influence the dividend payout policies. Minority shareholders have no control over the business but at least they can be sure of receiving dividend and thus value the corporation.
Justification – The primary function of the Dividend Discount Model is simple. Business is a perpetual entity. Investor pays a price today which entitles him to enjoy the benefits of all dividends the corporation pays throughout the lifetime. Analyst believe there is no subjectify to this model and it is crystal clear.
Consistency - Another advantage of DDM is the fact the dividends tend to stay consistency over long period of time. Companies do not set up high dividend expectations because not living up to them would affect the share prices. And the companies pay in cash only which is present with them every