Eps

€ 2.44

€ 0.64

€ 0.27

$0.11

$0.60

$0.65

R$ 0.20

R$ 0.01

R$ 0.85

Stock Price

€ 79.40

€ 43.90

€ 65.70

$20.72

$16.31

$23.33

R$ 3.91

R$ 6.76

R$ 10.60

Dividend Yield

1.64%

2.96%

1.98%

1.01%

1.29%

0.90%

3.53%

2.69%

3.00%

Dividend Payout

53.28%

203.13%

481.48%

190.91%

35.00%

32.31%

69.01%

1818.44%

37.41%

Of the three companies, Aracruz had the highest dividend yield across the three years. Disney and Deutsche paid the same dividends per share each year, but the volatility in their stock prices and earnings made the payout ratios and dividend yields volatile. In fact, Deutsche maintained its dividends at 1.30 Euros per share in the face of declining earnings per share in 2002 and 2003, a testimonial to the stickiness of dividends.

As noted earlier in the book, Aracruz, like most Brazilian companies, maintains two classes of shares - voting share (called common and held by insiders) and non-voting shares (called preferred shares and held by outside investors). The dividend policies are different for the two classes, with preferred shares getting higher dividends. In fact, the failure to pay a mandated dividend to preferred stockholders (usually set at a payout ratio of 35%) can result in preferred stockholders getting some voting control of the firm. Effectively, this puts a floor on the dividend payout ratio.

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