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C/F/13. Business financial management. Discussion Paper: comparison of dividend policies of Logica and BP over the past five years

WORDS:

2200

DATE:

2003

PRICE:

29.99 GBP

From these plots, a point of difference may be emphasized again, namely that BP plc has both more volatile and generally higher payout ratio than Logica. The former feature stems from the more volatile earnings of BP in the period under considerations, whereas the latter I believe is driven industry difference factors. Therefore, it appears as if industry sector is relevant the dividend policy, thus narrowing discretion of the companys management through expectations on the part of investors. Also, earnings volatility determines the dividend policy to the extend that some of it is passed on to the investor in the form of volatile dividends. To summarize, the key conclusion emerging from the analysis above is that dividend policy is driven by objective to keep dividend levels and growth rates stable, by neutralizing the volatility of earnings effect on dividends through adjustment in payout ratio.

KEYWORDS: f, business, financial, management, discussion, paper, comparison, dividend, policies, logica, bp, past, five,