Finance Case Study: Dividend Policy of Tourism Holdings Limited

This case study examines the dividend policy of Tourism Holdings Limited (THL). The analysis includes a review of THL's dividend pay-out policy over the past five years, including interim and final dividends, dividend yields, and pay-out ratios. It explores special dividends, share buyback offers (or lack thereof), and comparisons with peer companies. The case study considers the company's use of retained earnings and evaluates the appropriateness of the dividend policy, offering recommendations based on the financial data and industry context. The study also references the company's financial information available on their website.

Running Head: CORPORATE FINANCE 1
CORPORATE FINANCE

Running Head: CORPORATE FINANCE
Table of Contents
Dividend pay-out policy.............................................................................................................3
Special dividends.......................................................................................................................3
Share buyback offers..................................................................................................................3
Company’s current dividend yield.............................................................................................4
Peer companies data...................................................................................................................4
Similarities or differences.......................................................................................................4
Is the company’s dividend pay-out policy appropriate, in your opinion?..............................4

Running Head: CORPORATE FINANCE
Dividend pay-out policy
The dividend policy is termed as the policy that is used by the corporates to
reorganize the dividend pay-out to shareholders. It is concerned with the financial policies
when the dividend is paid at the current stage or the later stage. The dividend policy of
Tourism Holdings Limited is paid in the month of April of every year in case of interim
dividend, whereas in case of final dividend, the dividend is declared in the month of October.
In terms of the cents the highest dividend recorded is of 0.13 per share in case of the interim
dividend however, in case of final dividend, 0.14 per share is used. Around 58% of the
dividends are paid out from the profits earned. The company has the stable dividend policy
yet the company paid out fewer dividends than it reported in the profits.
The metric that is used to measure the dividend is the dividend pay-out ratio whereas
in comparison to the last year Tourism Holdings Limited paid free cash flows of around
574% and the same is quite concerning.

Running Head: CORPORATE FINANCE
Special dividends
Dividends received or receivable from associates and joint ventures are recognised as
a reduction in the carrying amount of the investment. As a part of the reinvestment plan the
company introduced 1735 ordinary shares at $4926 per share.
Share buyback offers
As such there were no buyback offers, offered by Tourism Holdings Limited.
Company’s current dividend yield
Peer companies data
Similarities or differences
Is the company’s dividend pay-out policy appropriate, in your opinion?
Consider differences from peers, how effectively the company is using its retained earnings
and any other factors you deem relevant to justify your decision.

Running Head: CORPORATE FINANCE
References
http://www.thlonline.com/FinancialInvestorInformation/Pages/Dividends.aspx