Examine annual reports for six most recent years for one of the publicly traded firms. Download the company’s annual report from its website or SEDAR (system for electronic document analysis and retrieval) or EDGAR (electronic data gathering, analysis, and retrieval) for the US firms. Print out pages that contain income statement, balance sheet and statement of cash flows.

Your goal is to perform analysis of the firm’s dividend policies. Answer the following questions:

1. Comment on sustainability of the firm’s dividend policies

A. estimate payout ratio

B. compare operating cash flow with capital expenditures and dividends

2. What type of dividend policies does the firm pursue – stable, constant payout, or residual dividend policy? You need to explain your choice.

3. Put together a table with earnings per share and dividend per share over six-year period. Is there any evidence of signaling?

4. Do stock buybacks add anything to your analysis above? You may want to examine total amount spent on buybacks and dividends over 5-6 year period.

Note: to speed things up, you may wish to perform search on keywords related to dividend and financing policies in annual reports, for example, “dividend policy”, “share repurchase”, “buyback”, “issuance”, or “recapitalization.”