Global Markets Liability Strategies Group February 2006 Corporate Dividend Policy Authors Henri Servaes Professor of Finance London Business School The Theory and Practice of Corporate Dividend and Share Repurchase Policy Peter Tufano Sylvan C. Coleman Professor of Financial Management Harvard Business School Editors James Ballingall Capital Structure and Risk Management Advisory Deutsche Bank +44 20 7547 6738 james.ballingall@db.com Adrian Crockett Head of Capital Structure
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15 Distributions to Shareholders: Dividends and Share Repurchases Answers to End-of-Chapter Questions 15-1 The biggest advantage of having an announced dividend policy is that it would reduce investor uncertainty, and reductions in uncertainty are generally associated with lower capital costs and higher stock prices, other things being equal. The disadvantage is that such a policy might decrease corporate flexibility. However, the announced policy would possibly include elements of flexibility
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Managerial Finance – Problem Review Set – Dividends Policy 1) If a firm adopts a residual distribution policy, distributions are determined as a residual after funding the capital budget. Therefore, the better the firm's investment opportunities, the lower its payout ratio should be. a. True b. False 2) Even if a stock split has no information content, and even if the dividend per share adjusted for the split is not increased, there can still be a real benefit (i.e.,
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the type that is capable of satisfying his investment objectives. These objectives which vary from one investor to another include:- i) security (safety of capital invested) ii) adequate return on investment by way of dividends iii) growth prospects/capital appreciation iv) spread of risks, etc. The exercise of security analysis is based on the general assumption that the intrinsic value of a company can be discovered by an assembly and analysis
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Looking Into WAL-MART The Company Every week, 100 million customers visit Wal-Mart stores worldwide, making it the world’s largest retailers. A leader in the discount industry, Wal-Mart posted $218 billion in sales last year as it continued to specialize in selling discounted household goods. The company has 1.3 million employees working at 3,200 locations in the United States and 1,100 locations in Mexico, Puerto Rico, Canada, Argentina, Brazil, China, Korea, Germany, and the United
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current ratio measures the company’s ability to pay its short term obligations with its short term assets. Between Coca Cola and PepsiCo, PepsiCo has a higher current ratio implying that is more capable of paying its obligations. The debt management policies of Coca-Cola in conjunction with share repurchase program and investment activity resulted in current liabilities exceeding current assets. From the ratio Pepsi Co suddenly had to pay all its short-term creditors, it would be able to do so and have
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Northboro Machine Tools Corporation * History * Founded in 1923 by two mechanical engineers and designed machinery parts, presses, dies, and molds * 1970s, firm begins its entry into computer aided manufacturing and design or CAD/CAM * By 1991, CAD/CAM made up 40% of sales * Revenue in 1991 * CAD/CAM accounted for 45% of sales * Metal presses, dies and molds accounted for 40% of sales * Miscellaneous machine tools accounted for 15% of sales *
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A critical analysis of AstraZeneca plc.’s shareholder wealth creation in the five-year period from 2010-15 * Xiaoyu Zhang August 2016 MSC in Accounting and Financial Management Global Pharmaceutical Industry Overview Pharmaceutical industry is closely bound up with people’s living standard, which also correlates general economic and deserves thoroughly research and analysis. Due to favorable demographic trends and significant unmet medical needs, the pharmaceutical industry is
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and reduced consumer expenditure as a result of a decrease in disposable income. Consumer spending and buoyancy have been relatively low as a result of unfavourable demands brought about by implementation of rigorous monetary and fiscal government policies. For the last few decades, companies have witnessed severe effects of the recession; hence they had to develop new strategies aimed at retaining existing customers while at the same time soliciting new customers. Morrison Supermarkets (WM) has been
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Case Analysis - FPL Energy FPL Energy is one of the nation’s leading independent generators of electricity. Dedicated to generating clean energy, 80 % of its capacity is fueled by clean and renewable resources. The United States is the nation with the largest generator of wind energy, and it operates the two largest solar fields in the world. FPL Group, with annual revenues of more than $8 billion, is one of the nation's largest providers of electricity-related services. Its principal subsidiary
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