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Analysis of financial performance and position

Dividend cover

EPS

–––––––––––––––––––––– = n times

Dividend per share

or

Profit for the year

–––––––––––––––––––––– = n times

Dividend paid

TUTOR GUIDANCE – NOT IN STUDENT NOTES
 Dividend cover outlines how many times out of earnings the entity can pay its
dividends.
 Higher the cover, the more likely dividend yield will be maintained.

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