Hi guys, referring to the calculation of PE ratio for both Vicom and Nestle example in the textbook.
Have some question, for the example of Vicom – since the share price as of 19 Apr 2019, to calculate the Net Cash per Share, do we use the 2018 Annual Report? Also how do we calculate the Net Cash per Share.
Similarly, how do we calculate Dividend per Share and the Dividend Yield based on Sustainable Dividend?
The net cash per share formula is to take the cash position minus the debt and then divide it by the number of shares.
When choosing net cash per share, you should always get the figure from the latest quarter of the company.
As for dividend per share and dividend yield formula is as per what Jieren had explained. For Vicom’s case, the dividend given out is more than their earnings. As the management mentioned that they will pay out 90% of earnings hence I take 90% of the earning to calculate the sustainable dividend.
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