QUESTION 2 BHP Group Limited is an Australian conglomerate that engages in the exploration, development, and processing

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Question 2 Bhp Group Limited Is An Australian Conglomerate That Engages In The Exploration Development And Processing 1 (186.41 KiB) Viewed 44 times

QUESTION 2 BHP Group Limited is an Australian conglomerate that engages in the exploration, development, and processing of iron ore, coal, and copper. Iron ore prices have plunged from $220 per ton in 2021 to just over $100 per ton in December 2021. Iron ore exports are one of the fundamental components of the company's revenue. Yet, BHP has just announced their intention to increase their dividend for 2021. Required (i) What might have motivated BHP to increase their dividend? What are the implications of BHP's announcement for financial markets? (10 marks) (ii) BHP board approved the establishment of a Dividend Reinvestment Plan (DRP) for the final implementation for the final dividend in the 2018 financial year. What are some of the major reasons BHP may have wished to establish a DRP? What benefits, if there are any, would a DRP offer to ordinary shareholders? (10 marks) (iii) Based on the past years of dividend payment history, how would you describe the BHP's dividend policy? Is the current dividend policy justified? Why or why not? Discuss the factors which in your opinion underlie the dividend policy of the company. If you were to advise the management about the dividend policy for FY 2022, what would you recommend? (10 marks) (iv) Critically evaluate BHP's financial and non-financial risks including ESG (Environmental, Social and Governance) and the way BHP managed those risks in the past five years. (20 marks)