Commonwealth Brewery’s (CB) 100 percent dividend policy may be an incentive to many investors to participate in its initial public offering (IPO), but it has come under scrutiny in regards to whether or not such a policy is sustainable.
At the heart of the issue is the question of whether the dividend policy of a 100 percent payout of net income would allow for necessary capital expenditure — spending on physical assets like equipment to accommodate future growth and production capacity at the brewery. Michael Anderson, president of Royal Fidelity, the financial advisor and placement agent for the IPO, told Guardian Business last week that the policy was sustainable and not new to ...

Click here to read more at The Nassau Guardian