Chapter 14, Problem 2TCL

Summary Introduction

To Explain: Whether cash flow per share exceeds the dividends per share by a safe margin for A Company

Dividend:

The dividend is the share of company’s earnings, which is decided by the board of directors to distribute among its shareholders. It is done when a company earns a profit in excess, which is expected and from that profit, they reinvest a certain amount in business and pay other portion as the dividend.