Corporate Finance: Instructor\'s Manual Applied Corporate Finance

Aswath Damodaran 477

II. The Peer Group Approach - Disney

Company Name Dividend Yield Dividend Payout

ABsetlora lC (^) oMrepd.i a' (^) AI'n c. 'A' (^10) .. 3040 %% 304 .. 1030 %% (^)
CanWest Global Comm. Corp. 0. 00 % 0. 00 %
CCilenarra mCh Ianntln Ienl c 00 .. 0805 %% 305 .. 2090 %%
Cox Radio 'A' Inc 0. 00 % 0. 00 %
CDuismneuyl u(sW Maeltd)i a Inc 00 .. 9000 %% 302 .. (^0310) %% (^)
Emmis Communications 0. 00 % 0. 00 %
FEnoxte Ercnotmmt^ C Gormoump. ICnocr p^00 ..^0000 %% 00 .. 0000 %%^
Hearst-ArgylInterActiveCoe (^) rTpe levision Inc (^00) .. 0000 %% 00 .. 0000 %% (^)
Liberty Media 'A' 0. 00 % 0. 00 %
LMine (^) trToV GCooldrwpy. (^) n Mayer 00 .. (^0000) %% 00 .. 0000 %% (^)
Pixar 0. 00 % 0. 00 %
RReadgaiol OEnntee (^) rItNaiCn.m (^) ent Group 02 .. (^0700) %% 660 .. 5070 %% (^)
SSiirniuclsa Sir (^) aBtreollaitdec ast 00 .. 0000 %% 00 .. 0000 %%
Time Warner 0. 00 % 0. 00 %
Univision Communic. 0. 00 % 0. 00 %
VWiaescotmwo (^) oIdnc .O 'Bne' (^00) .. 5006 %% (^190) .. (^0000) %% (^)
XM Satellite `A' 0. 00 % 0. 00 %
Average 0. 24 % 7. 20 %

We defined comparable firms as entertainment companies with market cap > $ 1

billion. The average dividend yield of these companies is 0.24% and the average

payout ratio is 7.20%. A simple comparison with Disney’s dividend yield of

0.90% and payout ratio of 32.315 would indicate that Disney is paying too

much in dividends. (But is this fair? Disney is larger, more mature and more

stable than most of the companies in this group...)