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Volkswagen Report

Autor:   •  November 14, 2017  •  Case Study  •  372 Words (2 Pages)  •  7 Views

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Dividend Policy and repurchases

Dividend payout ratio=0.30

VW’s dividend policy matches its financial strategy.

• Continuous dividend growth for the shareholders—ensure a solid financial foundation—very consistent

• €2 per ordinary share and €2.06 per preferred share. Total dividend for fiscal year 2016 amounts to €1 billion

• Dividend yield on ordinary shares and preferred shares are both 1.5(0.1)%

• No stock splits in the past five years

• VW bought back stocks for 4.08 billion in September 2017. Stock price increased after the buyback

• The distribution ratio is based on Volkswagen AG’s earning after tax attributable to its shareholder. For the reporting period (2016), it was 19.7%; and it was negative in 2015. VW aims to achieve a distribution ratio of 30% in the new strategy

• In fiscal year 2016, earnings per ordinary share were €10.24 (-3.20)

Key events:

Announcements

• In September 2015, VW’s stock price fell about 30% due to the diesel emission cheating scandal (VW used software to hide the emission of its car products)

• Shares of VW fell from $160 to $110

• VW set $18 billion for financial penalties related to the scandal

• VW had a diesel buyback in 2016, paying back the 500,000 diesel drivers it defrauded by selling them cares that failed to meet the emission requirement. This led to a asking price climb

• CEO (Martin Winterkorn) resigned after the scandal, helping the company in the short term. The stock rebounded

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