Answer:
b. Will always be higher than the dividend paid per share
Explanation:
A firm pays dividend to it's stockholders based upon it's earnings.
Earnings per share (EPS) is expressed as:
=
Dividend payout ratio on the other hand is expressed as:
= EPS (1 - b)
wherein, b = retention ratio which denotes the percentage of earnings retained by a firm i.e not distributed as dividends.
Thus, a firm's earnings per share would always be higher than the dividend paid by it per share.
Answer:
a. Maximin = 19.0
b. Minimax = 17.6
c. Hurwicz ( 0.40) = Taiwan
d. Equal likelihood = Taiwan
Explanation:
Remember, we are told to: Note that since the payoff is cost, the maximax criteria becomes minimax and maximin becomes minimax
a) Maximin: Since the payoff is cost, we begin by determining the maximum cost for each alternative and then selecting the one which gives the minimum of these maximums. (minimax)
b) Minimax: Since the payoff is cost, we begin by determining the minimum cost for each alternative and then selecting the one which gives the maximum of these minimums. (maximin).
c) Hurwicz (0.40): In this method, we add and multiply each payoff value by alpha (0.4).
South Korea = 15.2 (0.4) + 21.7 (0.6) = 19.1 ( remember, in $ millions)
China = 17.6 (0.4) + 19.0 (0.6) = 18.44
Taiwan = 14.9 (0.4) + 19.2 (0.6) = 17.48
Poland = 13.8 (0.4) + 22.5 (0.6) = 19.02
Mexico = 12.5 (0.4) + 25.0 (0.6) = 20
From the values above we select the minimum outcome since the company is looking at saving cost. Which is Taiwan; having the lowest cost of $17.48 million.
d) Using the formula where P = payoffs value, n = number of events.
South Korea = 15.2 + 21.7 + 19.1 /3 = 18.66
China = 17.6 + 19.0 + 18.5 /3 = 18.36
Taiwan = 14.9 + 19.2 +17.1 /3 = 17.06
Poland = 13.8 + 22.5 + 16.8 /3 = 17.7
Mexico = 12.5 + 25.0 + 21.2 /3 = 19.56
Taiwan should be selected since it has the lowest cost of $17.06 million.