Financial Management Questions

Q5. Putting yourself in the position of an existing dispenseholder(investor) of your company, phthisis both the yearbook corporate report and the nurture about your companys make do toll in the Financial Times, provide a good word (with reasons) whether you rate your companys parcels as Buy, conserve or Sell. There are a abundant range of factors that affect share scathe. These include arouse order, inflation, the proceeding of the industry/sector the company is in, the performance of the company itself, and the market supply and demand for the companies shares.The pursuance graph shows attach and Spencers share price everyplace the last 12 months. http//corporate. marksandspencer. com/investors/shareprice/chart Accessed 05/12/11 By viewing the graph, we can instruct that in that respect have been numerous fluctuations in share price all over the last 12 months. At the start of the year share price was at around 370 pence per share and dropped down to around 330 pence per share after 3 months. There was then a surge in share price which reached over 400 pence per share at its peak in May.It then fell to its lowest point, just above 300 pence per share in September and there have since been small fluctuations in share price. Its catamenia share price is at 329. 00 but we wait it to continue to fluctuate slightly before in the end increasing again into the New Year, as share prices do generally remain low over the Christmas period. The following table is share information that was publish in The Financial Times weekly update on Monday 5th celestial latitude 2011. Price Wks% Chg Div Div Cov Mcap ? extend xd Marks&Sp 330. 10 +7. 3 17 2. 3 5,233. 3 16. 11 Using the data acquirable from this table and information published in the annual company report, we can work out dividend engender and dividend dispense. Dividend yield tells you the percentage cash return on the investment, and can be directly compared with have-to doe with rat es and other investment opportunities. It expresses the dividend per share as a percentage of the current share price (McKenzie, 2010385).It is thence worked out by dividing the dividend per share which is 17 pence, by the current price by share, which is 330. 10, and then multiplying the response by 100. The dividend yield can then be worked out as 5. 17%. This would therefore be a worthwhile investment considering many interest rates for banks are less than 1%. The dividend subvent measures how many times the dividend could be paid from the addressable profits (McKenzie, 2010384). The financial times reveal that the dividend cover is 2. 3, and therefore the dividend could be paid 2. 3 times out of Marks and Spencers available profits.This shows that Marks and Spencer are using quite a firm amount of profit to turn over out dividends, most half. This may be rewarding for a shareholder spirit for a quick return, however, shareholders who are looking to invest in Marks and Spencer in the commodious run may find it more skilful if Marks and Spencers reinvested their profits into the business. Taking everything into account, we would urge a shareholder to hold their shares, as we hope that there will be a ascension in share price in the approach shot months, so they will therefore make a better return if they do wish to sale in the future.The dividend yield shows that Marks and Spencer offer a good return on investment, compared with other alternatives such as bank interest rates. And also they use a considerable amount of their profits to pay shareholders dividends, so we believe it would be worthwhile retentivity onto the shares for the time being at least. Financial Times, Monday December 5 2011, p. 26 McKenzie, W. (2010) Using and Interpreting go with Accounts. FT Prentice Hall. p. 384-385