000 Retained earnings 129,000 66,000 $1,587,000 $1,326,000 1. The Accumulated Depreciation account has been credited only for the depreciation expense for the period. 2. The Retained Earnings account has been charged for dividends of $138,000 and credited for the net income for the year. The income statement for 2011 is as follows: Sales $1,980,000 Cost of sales 1,089,000 Gross profit 891,000 Operating expenses 690,000 Net income $ 201,000
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Topic: Behavioural corporate finance Lecturer: Yue (Lucy) Liu E-mail: Yue.Liu@ed.ac.uk Outline Psychological phenomena Biases Heuristics Framing effects Impact on corporate finance Valuation Capital Budgeting Capital structure Dividend policy Mergers and acquisitions Yue (Lucy) Liu 2011/2012 Corporate Finance 2 Psychological phenomena Bias Excessive optimism Overconfidence Confirmation bias Illusion of control Heuristics Representativeness Availability Anchoring
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Noncash share transactions; lump sum sales. 5. Treasury share transactions, cost method. 6. Preference stock. 7. Equity accounts; classifications; terminology. 8. Dividend policy. 9. Cash and share dividends; share splits; property dividends; liquidating dividends. 10. Restrictions of retained earnings. 11. Presentation and analysis *12. Dividend preferences and book value. 1, 2, 6 4, 5 1, 3, 4 1, 4 2 11, 12, 17 7, 8 3, 6, 7, 9, 10, 18 2, 8 10, 11, 16, 17 1, 2, 3, 5, 6, 7 1, 3 9, 11,
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Harvey Norman 12 2.6 Evidence of financial distress 13 2.7 Optimal Capital Structure 14 3. Dividend Policy 15 3.1 HVN’s Dividend history 15 3.2 Competitors Dividend Analysis 16 3.2.1 David Jones Limited (DJS) 16 3.2.2 JB HI-FI Limited (JBH) 17 3.2.3 Comparison 17 3.3 Alternatives of Paying Dividends 18 3.4 Company’s Characteristics 19 3.5 Optimal Dividend Policy 19 4. Valuation 20 4.1 Methodology of valuation 20 4.2 Operating revenue estimation and
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DIVIDENDS & STOCK REPURCHASE - I Dr. Kulbir Singh ACF Term III 2013-14 IMT Nagpur • Shareholders love it. • Bondholders hate it. • Managers consider it obvious. • Financial economists find it puzzling. • What is it? • Dividends; what else?! INTRODUCTION Dividend has been defined u.s. Sec 2 (14A) of the Companies Act, 1956 Dividend payment by Indian Companies are regulated by Sec 205 of Companies Act, 1956 Dividend is distribution of divisible or distributable profits of a company among
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fluctuations. Taxes were estimated to be 27% based on the facts in the case. Once we calculated the net profits, we then estimated regular dividends paid each year. Based upon the cash flow statements in Exhibit 1, Diageo was paying approximately 35% of the operating income out as regular dividends each year. We used the same estimated rate of dividend payments for each period. Interest Coverage was calculated each year based the calculated EBIT and interest payments. When the interest rate
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Analysis 5 3.1.1 Interest Coverage Ratio 6 3.1.2 Managerial Inertia Theory 7 3.1.3 Security Mispricing Theory 7 3.1.4 Pecking Order Theory 8 3.2 Optimal Leverage Analysis 8 3.2.1 Trade -Off Theory 8 3.2.2 The Dividend Imputation System in Australia 10 3.2.3 Agency Theory 11 3.2.4 Stakeholder Theory 12 3.2.5 Predation /
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Valuation results Campbell Soup Risk Characteristics Approach Beta Jensen's Alpha R squared Investment Performance ROE - COE ROC - WACC EVA (Millions) Capital Structure Current Debt rati o Optimal Debt Rati o Change in WACC Duration (Years) Dividend Policy Dividends (Millions) FCFE (Millions) Valuations Value/share Price/Share 259 428.0 27.45 29.5 0 -$37.0 20.09 30.25 76.70 231.0 35.6 34.4 0 128 38.5 48.7 892.4 309.5 40.5 34.7 B 0.94 0.12% 4% N/A 10.43% 106.5 23.97% 40% -0.15% 0.25 Cheesecake Factory
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grown his business steadily and was solidly profitable. Most of the supermarkets had been modernized and its brand name was well known. The common stock was distributed among 15 grand children and nephews of Jacob Breezeway. The commitment to high dividend payout had reduced the earnings available for reinvestment and thereby constrained growth. Mr. Breezeway wanted to take Prairie Home public, but what should he sell the shares for? He worried that the shares would be sold, either publicly
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companies to make all corporate shares public, and if the anonymous shares are not removed then the companies themselves should disappear. Anonymous shareholders will also lose their rights within these companies such as voting at meetings and receiving dividends. The reasoning behind this is to create a more transparent corporate world in the Czech Republic. As well, this law will help towards ending corruption and criminal acts in the corporate world. Many of these companies have been viewed as a front
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