International Financial Management: Critical Analysis of Shell's Dividend Distribution Policy, Efficient Market Hypothesis Theory, and Project Appraisal Methods

This report critically analyzes Shell's dividend distribution policy, efficient market hypothesis theory, and project appraisal methods in the context of international financial management. It includes a discussion on the company's plans to increase its dividend per share, the efficient market hypothesis theory, and the viability of major investment initiatives.

International Financial
Management

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BOSY..................................................................................................................................................3
Critically analyses and evaluate chosen multinational corporation’s dividend distribution policy..........3
Critically analyse the efficient market hypothesis theory in the context of your chosen multinational
corporation’s operations.........................................................................................................................5
Critically analyse and evaluate your chosen multinational corporation’s methods of appraising
projects....................................................................................................................................................6
CONCLUSION...............................................................................................................................................7
REFERENCES................................................................................................................................................8

INTRODUCTION
International financial management, often known as international finance, is the handling of
money in a global corporate environment, encompassing everything from marketing and gaining
profit to central bank conversion. Companies will benefit from foreign financial activity by
engaging with global business relationships including buyers, contractors, and financing. It is
also used by government entities and non-profit organizations (Liu and et.al, 2017). This report
based on Shell is a world's energy business with competence in oil and gas exploration,
extraction, processing, and advertising, as well as chemical processing and sales. They assist
establish a renewable energy environment by utilizing advanced instruments and taking a fresh
solution. They also invest in renewable energy, like wind energy, as well as new transportation
fuels, including such renewable fuels and protons. In this report consist of dividend distribution
policy, methods of appraising projects and efficient market hypothesis theory.
MAIN BOSY
Critically analyses and evaluate chosen multinational corporation’s dividend distribution policy
Shell plans to increase its dividend per share by roughly 4% per year, according to Official
permission, and to distribute 20-30% of its cash flow from operating activities to investors. The
company plans to return funds to investors throughout time throughout a mixture of dividends
and share repurchases. The Board considers a number of variables when determining stakeholder
compensation, such as the macroeconomic climate, the Group's overall business revenues and
working capital, the present income statement, capital growth and disposal intentions, and
current obligations. Dividends will be issued and distributed monthly, as is our objective.
Dividends are issued in US dollars, and the Euros and pounds corresponding amount will be
announced at a future stage (Baisden, Fox and Bartholomae, 2018).
There is just no reason to issue dividends by cheques in 2021. Cheques are costly, inconvenient,
and prone to fraud for a business. For stockholders, there is a corresponding disadvantage. The
paycheck is cut on a set date, but investors do not collect their dividend unless they receive it in
the mail and cash it at their bank, subjecting them to inconvenience, costs, stopped being
interested, and danger. We couldn't stand the idea of such a behavior, therefore we got rid of

checks completely. It was an opportune moment to do so. While Shell's dividend payments have
always been a problem, settling a multibillion-dollar dividend via hundreds of physical cheques
during a COVID-19 lockout would have been disastrous.
 Dividends on Shareholdings are payable in Euros by standard, however shareholders of
Class A shares can choose to earn profit in US dollars or British pounds.
 Dividends on Class B shares are paid in pounds sterling by standard, however
shareholders of Class B shares can decide to purchase shares in US dollars or Euros
(Zéman and Lentner, 2018).
 Dividends on American Depositary Shares (ADSs) are payable in US dollars.
 Share dividends will be distributed in Euros at a rate of €0.1426 per A Share by default.
By May 28, 2021, holders of A Options who have filed valid language selections in US
dollars or British pounds will receive compensation of US$0.1735 or 12.26p per A Share,
accordingly.
 B Share dividends will be distributed in pounds sterling at a ratio of 12.26 pence per B
Share by definition. B Shareholders who filed valid language choices in US dollars or
Euros by May 28, 2021 will receive compensation of US$0.1735 or €0.1426 per B Share,
correspondingly.
 Dividend payments receivable in cash in Euros and British sterling were translated from
US dollars using an averaged of current exchange rates for three trading days from June 2
to 4, 2021.

Critically analyse the efficient market hypothesis theory in the context of your chosen
multinational corporation’s operations
As per the efficient market, new information enters the marketplace and is immediately
reflected in asset prices; hence, either qualitative or architectural research may result in excessive
gains. New studies on behavioral finance, movements investing, and common fundamental
proportions that purported to invalidate the theory are examined, and the researcher concludes
that this is not important in the long run. Given the significant infrastructural and technology
costs required in establishing a firm, there are only a few businesses on the market. Additionally,
this business has considerable entrance hurdles. Once a firm has joined, meanwhile, it can only
compete by producing huge amounts, which raises the rate of competitiveness. Shell collaborates
with consumers primarily through geographic segmentation methods. Being in the oil sector,
they have a commodity that is in high demand all over the world. As a result, they must
concentrate on regions in order to deliver better goods (Morozko and Didenko, 2018).
The organisation has a differentiated targeting approach to meet the demands of clients in
various categories. They provide a variety of value-added services in order to set themselves
apart from other companies in the same industry. It employs valuation branding techniques to
engage with individuals and businesses across the globe through its products. Greater
differentiation creates more value, which improves the company's position. He will give risk
assessments and insights to upper executives while also interacting with colleagues in the
international Banking and Risk Management department and giving market-specific information
and guidance. Among some of the teams involved are Valuation, Statistical Analytic, Risk
Mitigation Management, and Technical Accounting. The Oil Market Risk Team will offer an
unbiased opinion on whether the company is being compensated appropriately for the risk it is
incurring (Wang and Wu, 2018).
 Design and execute fair economic value standards throughout the Products Oil business,
collaborating with overall risk management to maintain consistency. This involves
offering modeling assistance and collaborating in discussions on valuing sources and
constraints (Spantig, 2017).

 Before any income is declared, make absolutely sure that all vulnerabilities are well
recognized, yet this exposure and the resulting P&L are appropriately examined,
confirmed, and analyzed.
 Deliver impartial advice and assistance on the company's degree of risk/return and if it's
in line with the agreed-upon risk aversion.
 Offer new company proposition evaluation, assessment, and feedback. Provide peer
assessment and opposition to transaction offers for other firms, if needed. Ascertain that
the infrastructure and supporting activities are in place and ready to go because
commerce begins.
 Evaluate and implement SOX controls inside their business, as well as handle
interactions with auditors once they've been finished (Raykov, 2017).
 Collaborate with the Appraisal and Statistical Intelligence teams to better comprehend
and model integrated physically additional flexibility, as well as how physically asset
allocation affects vulnerabilities.
 Help to define and managing limits for the Products Petroleum industry, but also play a
vital role in setting global limits for the Dealing and Supply Company. Ascertain that all
trade activity stay within the established limitations, and escalate as needed if they are
violated.
Critically analyse and evaluate your chosen multinational corporation’s methods of appraising
projects
Major investment initiatives' viability and viability are typically susceptible to a largely or even
completely unpredictable future, involving uncertainty and many sorts of risk. They look at key
difficulties in the field of construction assessment approaches, such as potential risks, suitable
risk assessment, project length, and project interdependence. The advantages and disadvantages
of the most prevalent project assessment methodologies are discussed (Hall, 2017).
Consumption, efficiency improvements, estimated sales, variety of predictions, and anticipated
profitability are among the utilized to assess evaluated in economic analysis. A profitability and
liquidity objective, it is stated, should be in consideration, since this will govern other elements
of the business such like sales, purchases, and spending. It would be necessary to figure out how
many sales are designed to break even. The demand for the items will undoubtedly be assessed
in order to anticipate overall sales. Since a consequence, volume of sales must be precisely

determined, as it is the deciding factor in the developer's profit to a considerable extent
(Erauskin, I. and Turnovsky, 2019).
In the management of soil and water risks, sustainability is becoming increasingly vital. A
graded method to life cycle assessment is recommended by sustainable building repair models.
The outcomes of evaluations conducted at tiers 1, 2, and 3 as explained in the UK structure were
especially in comparison, and it was discovered that, for a comparatively straightforward correct
problems, a tier 1 evaluation appears to result in dependable corrective alternative short listing,
which was consistent with decisions made using more complicated tiers 2 and 3 appraisals. As a
result, the new global standards' tiered strategy is thought to be beneficial. According to our
findings, a simple tier 1 sustainability analysis may be adequate for very minor remedial
initiatives. The tier 1 evaluation was successful in identifying a small number of corrective
solutions that were obviously superior to others (Goel, Cagle and Shawky, 2017).
CONCLUSION
According to the aforementioned research, international economics is the management of
financial connections between various countries. Foreign investment and economic changes in
the banking markets are examples of topics covered by international finance. The banking
business has grown in importance as a result of increased globalisation.

REFERENCES
Books and Journal
Liu, X. and et.al, 2017. Features of spillover networks in international financial markets:
evidence from the G20 countries. Physica A: Statistical Mechanics and its
Applications. 479. pp.265-278.
Baisden, E. D., Fox, J. J. and Bartholomae, S., 2018. Financial management and marital quality:
A phenomenological inquiry. Journal of Financial Therapy.
Zéman, Z. and Lentner, C., 2018. The changing role of going concern assumption supporting
management decisions after financial crisis. Polish Journal of Management Studies. 18.
Morozko, N. and Didenko, V., 2018. Financial management of small organizations based on a
cognitive approach.
Wang, X. and Wu, C., 2018. Asymmetric volatility spillovers between crude oil and international
financial markets. Energy Economics. 74. pp.592-604.
Raykov, E., 2017. The liquidity-profitability trade-off in Bulgaria in terms of the changed
financial management functions during crisis. Management: journal of contemporary
management issues. 22(1). pp.135-156.
Hall, S., 2017. Rethinking international financial centres through the politics of territory:
renminbi internationalisation in London's financial district. Transactions of the Institute
of British Geographers. 42(4). pp.489-502.
Goel, S., Cagle, S. and Shawky, H., 2017. How vulnerable are international financial markets to
terrorism? An empirical study based on terrorist incidents worldwide. Journal of
Financial Stability. 33. pp.120-132.
Erauskin, I. and Turnovsky, S. J., 2019. International financial integration and income inequality
in a stochastically growing economy. Journal of International Economics. 119. pp.55-74.
Spantig, L., 2017. International financial institutions: Business as usual in Tunisia?. In Tunisia's
International Relations since the ‘Arab Spring’ (pp. 215-237). Routledge.
Online
Dividend distribution policy, 2021. [Online]. Available through;
<https://www.shell.com/investors/dividend-information/dividend-announcements/first-
quarter-2021-interim-dividend.html>