We are comparing two companies that are listed on the ASX and which have disclosed the following details.
Blue Wind Ltd
Profit after tax of $25 million for the last financial period.
Pays $2 million in preference share dividends (the preference shares classed as
equity).
Had 10 million ordinary shares on issue for the first nine months of the year and 12.5
million shares on issue for the last three months of the year.
The dividend paid for the year on its ordinary shares is $1.00 per share.
The latest share price is $16.
Blue Bells Ltd
Profit after tax of $50 million for the last financial period.
Pays $4 million in preference share dividends (the preference shares are classed as
debt).
Had 30 million ordinary shares on issue for the full year.
The dividend paid for the year on its ordinary shares is $0.95 per share.
The latest share price is $49.
TASK:
a) Please calculate the basic EPS, price earnings ratio and dividend payout ratio for each
of the companies. (12 Marks)
b) Please compare the calculations made for each company. (12 Marks)
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