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With reference to the data in Appendix B, Figure 3, do you think the shareholders of Scott Electronics plc will be pleased with the company’s financial performance in 2011?

Shareholder Definition - An individual, group, or organization that owns one or more shares in a company, and in whose name the share certificate is issued.

Both the dividend per share and dividend yield have improved. The dividend per share went from 20p in 2010 to 40p in 2011, the dividend yield rose from 13.3% in 2010 to 20% in 2011. The rising dividend per share and dividend yield will make owning these shares more attractive, this encourages existing shareholders to retain their shares. It will also reduce pressure off of the company due to the shareholders hopefully being satisfied with the increase in the dividends paid which is has been a concern for the shareholders in the past.

The share price has risen from £1.50 in 2010 to £2.00 in 2011. Because of the rising share price, it will please existing shareholders and may attract potential investors.

The dividend yield is still below the industry average, this may mean shareholders may not be content with the lower than industry average dividend yield and this could lead to the shareholders selling their shares.

The Shareholders of Scott electronic plc will be pleased with the company’s financial performance of 2011, this is because of the increase in the dividend per share. This will hopefully encourage existing shareholders to retain their shares. But this is dependent upon the shareholders’ expectations.

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