Subsidiary Financial Management

You may perform the following financial actions to your subsidiary companies.

Capital Injection

If you own 100% of the subsidiary company, you may inject capital directly into it.

To do so, access Financial Actions from the Information Center (or press F11), and select the Capital Injection page, as shown below.

Financial Action for 100% owned subsidiary

Issue New Shares

You can order your subsidiary companies to issue new shares in the following ways:
1) Issuing new shares to the Public.
2) Issuing new shares to the Parent Company.

Issue New Shares to the Parent Company

If you own less than 100% of your subsidiary company, you want to provide your subsidiary with new funding, you may use the function “Issue New Shares to Parent Company” as shown below.

Financial Action with less than 100% ownership of the subsidiary
New shares must be wholly subscribed by the parent company and the issuing price must be higher than the current stock price in the market, so that the parent company does not enjoy any advantages over other shareholders of the company.

Set Dividend of Your Subsidiary

When you own 75% or more of your subsidiary company, you may either set the dividend yourself or let the CEO of your subsidiary company set the dividend.

If you choose “I will set the dividend”, you can set the Dividend Payout Ratio using the [+] and [-] buttons.

Financial Action with 75% or more ownership of your subsidiary

Dividend Payout Ratio is the percentage of earnings paid to shareholders in dividends. The greater the dividend payout ratio, the more cash is returned to each investor when the dividend is paid out each year.

On the lower part of the screen, you will see a graph for the Actual Dividend Ratio, which is a percentage calculated by dividing the latest dividend paid by the stock price.

About the difference between Dividend Payout Ratio and Dividend Yield:
The Dividend Payout Ratio is calculated based on earnings per share, whereas the Dividend Yield is calculated based on the stock price.