Corporate Finance

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  • Topic: Finance, Capital structure, Stock
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Assignment on
An Appraisal on Dividend Policy and Capital Structure of
Fu-Wang Ceramic Industry Ltd.
Corporate Finance (FIN-507)
Sec-01

Prepared For:

Dr. Tanvir Ahmed Chowdhury
Department of Business Administration
East West University

Prepared By:

Md. Iftekharul Haque
ID: 2009-3-95-052
Shazzad Hossain
ID: 2010-2-95-155
Md. Yahyea
ID: 2009-1-95-040
Rakesh Mondal
ID: 2010-1-95-025
Hasanuzzaman Chowdhuri
ID:2009-1-95-095

Submission Date: March 30, 2010

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Dividend Policy

Background:

Fu-Wang ceramic industry ltd is a multi-national company whose has establishment in Taiwan, Malaysia and Bangladesh devoted manufacturing ceramic wall and floor tiles and roofing tiles and none of the leading ceramics roofing tiles manufacturer in since twenty years. Fu-Wang Ceramic Industry Ltd was incorporated on 31 may 1995. It was listed under DSE (Dhaka Stock Exchange) as well as under CSE (Chittagong Stock Exchange) on May 1998. The first commercial production of the company was begun in 1996. The business lines of Fu-Wang Ceramic Industry Ltd are manufacturing and marketing of various type and size of floor tiles, wall tiles, stair tiles and skirting. There are 527 employees are working under the company.

Table: (a) Net income after tax, Growth of Net income, Earning per share, Dividend, Net asset value per share or per share value:

|Date |Net income after |Growth of Net |EPS |Dividend (%) |Retained earnings |Net asset value per| | |tax in BDT (mn) |income | | |in BDT (mn) |share | |2002-2003 |22.174 |- |7.39 |10% |15.999 |133.25 | |2003-2004 |19.048 |-14.09% |6.35 |5% |18.55 |137.30 | |2004-2005 |21.263 |-04.11% |7.09 |6% |27.36 |147.71 | |2005-2006 |21.264 |-04.10% |7.09 |7% |39.1 |148.67 | |2006-2007 |7.269 |-67.22% |2.42 |5% |39.5 |148.82 | |2007-2008 |-7.440 |-133.55% |-2.48 |5% |25.3 |144.07 | |2008-2009 |2.548 |-88.51% |0.85 |10%B |12.8 |134.92 | |2009-10 |24.276 |9.48% |7.71 |10%B |14.8 |139.10 |

Table: (b) Dividend Payout ratio:

|Date |Net income after tax in BDT (mn) |Dividend in BDT (mn) |Dividend payout ratio | |2002-2003 |22.174 |33.00 |148.82% | |2003-2004 |19.048 |16.50 |86.66% | |2004-2005 |21.263 |8.19 |38.52% | |2005-2006 |21.264 |9.555 |44.94% | |2006-2007 |7.269 |6.828 |93.93% | |2007-2008 |-7.440 |6.803 |-91.44% | |2008-2009 |2.548 |15.00...
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