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| Q.16 |
What is the principal shareholders, number of shareholders, and composition of Mitsubishi Corporation's shareholders? |
| A.16 |
Please click here for shareholder information.
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| Q.17 |
What is MC's position regarding its dividend? |
| A.17 |
We have based our dividend policy on using retained earnings to make investments that will drive our growth and maximize corporate value. At the same time, since fiscal 2005, the company has also taken into consideration consolidated net income, as well as retained earnings available for dividends to directly return profits to shareholders in line with operating results in each fiscal year.
Due to the existence of abundant investment opportunities, Mitsubishi Corporation’s basic policy will continue to be to use retained earnings for investments that will drive growth while paying a dividend that reflects the amount of earnings. While also taking into consideration the need for funds to invest, the financial condition of the parent company and other factors, Mitsubishi Corporation will determine the dividend in a flexible manner with the target of a consolidated payout ratio of 15% or more. |
| Q.18 |
What are Mitsubishi Corporation's current credit ratings? |
| A.18 |
Credit ratings of Mitsubishi Corporation (As of November 20, 2006)
| Rating Agency |
Rating |
| Standard and Poor's (S&P) |
Long-term: A+/Short-term: A-1 (Outlook: Stable) |
| Moody's Investors Service |
Long-term: A1/Short-term: P-1 (Outlook: Positive) |
Rating and Investment
Information, Inc. (R&I) |
Long-term: AA-/Short-term: a-1+ (Outlook: Stable) |
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| Q.19 |
What is the significance of the debt-equity ratio? Should companies always try to lower this ratio? |
| A.19 |
A low debt-equity ratio shows that a company can use equity to meet a large share of its funding requirements for business activities. Mitsubishi Corporation's debt-equity ratio was more than 10 during the 1980s when there was a large volume of investments. This figure then dropped to about 4 in the 1990s. In the wake of the Asian currency crisis, we limited our debt while increasing equity as credit ratings for Japanese companies in general declined. As a result, we estimate that our debt-equity ratio, net of cash and cash equivalents, was only about 1.3 at the end of March 2006. INNOVATION 2007 calls for us to make investments in promising businesses in order to support growth. To fund those investments, we plan to use a combination of earnings and debt. Of course, the proper amount of debt to use for each investment depends on the accompanying risks. That means the optimum percentages of equity and debt will differ based on the risk profile of each investment. Basically, companies can use a greater share of debt as the level of risk falls. Therefore, one cannot generalize by saying that a low debt-equity ratio is better than a high ratio. We can say that, due to the big improvement in our earnings, we expect to complete the various initiatives contained in INNOVATION 2007 without a significant increase in our debt-equity ratio. |
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