woolworth

Issued Capital

Issuing capital is one of the most common way to fund capital. The bar chart below shows the issued capital of woolowrths in past five years. We can see from the chart that there was a decrease of issued capital from 2009 to 2010. This because woolworths activated a off market share buy back plan which bought back 326.3 million shares in 2010. This means woolworths returned more than 1 billion dollars to its shareholders in this year.

From 2010 to 2013, there is an upward trend of issuing capital. The issued capital kept growing from 3784.4 million in 2010 to 4522.7 million in 2013. There are two reasons for this growth. The first reason is that woolworths has a dividend reinvestment plan (DRP) for each financial year. In 2010 and 2011 the dividend reinvestment rate were both 14%. After that, the dividend reinvestment rate was 13% in 2012 and 12% in 2013.

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To satisfying the demand of shares from reinvestment, woolworths has to issue new shares. For example, in 2013, the shares worth $198.6 million were issued for the demand from DRP. Table 1 below summarizes the how much the new issued share worth for DRP in past five years.

Table 1

The other factor lead to the increasing of issued capital is "the option exercised under executive share option plan". Table 2 below shows how much new shares issued worth for this purpose.

Table 2

By contrast, we examined the issued capital of Loblaw for past five years at the same time. The issued capital of Loblaw is relatively stable in recent four years. $1476 million in 2010, $1540 million...