CASE STUDY: Linear Technology team 6 2005120111 Lim jinchul 2010150013 Lee hyeyeon 2010150028 Choi eunyoung First, Linear have paid stable dividends to shareholders since 1992. They initially set the dividend at a relatively low level. By setting the dividend at a low level, Linear could maintain a sustainable payout ratio. Also, shareholders come to expect dividends
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1. Describe Linear Technologies payout Being very successful and having positive cash flows, Linear Technology announced its first dividend payment to its shareholders in October 1992. This is for giving the credibility to investors. Linear set dividend at $0.05 per share and this amounted to $8.3 million, or 15% of 1994 earnings. Linear continued their policy to increase dividend in 2002 when company's drop in sales and earnings so their payout ratio increased to 25%~30%. Considering the general
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Case Analysis 3: Linear Technologies Payout Policy, Tax Considerations, Cash Retention and Information Asymmetry Christopher Mafi 22996 Karl Bokvist 23020 Oscar Bjurviken 23082 Edwin Olsson 23106 Executive Summary Linear Technologies has throughout the years experienced high growth in both revenue, net income and in cash. Despite declining sales, margins have remained high and Linear by comparison to other companies has the financial possibility to increase its dividend to higher levels
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without adversely affecting the firm’s stock price because cutting or not paying dividends would be interpreted as a negative signal about the firm’s future prospects. 3. LT is considering increasing dividends in the 4th quarter of 2003. Is Linear Technology in a financial position to consider a dividend increase (particularly in light of the sharp decline in sales and profits in fiscal year 2002)? The past historical trend of LT’s dividend increases shows an increase of $0.01 each year. If LT
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1. Yes. Robertson Tool Company had been going through a few years of low sales and profit, and, coupled with conservative financial and accounting practices, was far behind the normal growth rate for companies in its industry. Robertson’s 50% control of the market for clamps and vises, along with its good position in the scissors and shears’ $200 million market, let it compliment the diverse holdings of Monmouth. These are attractive attributes of Robertson, but the selling point lies in the
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------------------------------------------------- Re: Changes to Dividend Policy at Linear Technology ------------------------------------------------- The purpose of this memo is to provide a recommendation to Paul Coghlan, CFO of Linear Technology, regarding adjustments to the company’s dividend policy. Linear Technology’s current dividend policy yields a higher than average payout ratio and sets them apart from other technology firms. The firm’s financial data for the past five years as well as data
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------------------------------------------------- Dividend Policy at Linear Technology Linear Technology (LT) was founded in 1981 in California by Robert Swanson. The company went public on the NASDAQ in 1986. Linear Technology manufactures custom-design integrated circuits (semiconductors) for electronic appliances in the telecommunication, computer and the automotive industries. It is the seventh largest company listed on the Philadelphia Stock Exchange Semiconductor Index (SOX). The success of Linear Technology depends on the top of the
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Dividend Policy at Linear Technology Firms pay dividends for a multitude of reasons, such as the ability to make use of excess cash that stockpiles when a firm lacks enough viable investment opportunities with positive NPVs. Paying dividends can also send strong signals to investors of positive future earnings while rewarding them with immediate cash returns. From the market’s perspective, merely sending statements that a company is financially healthy doesn’t hold much weight. However, when a
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Financial Management Assignment Linear Technologies Case Solution 1) Describe Linear Technologies pay-out policy. As we can see from Exhibit 1 Linear Technology has been paying dividend steadily since 1992. Thus the pay-out policy is a large part in dividends. Its first dividend is paid in 1992. The dividend policy has grown over the years. This may be so that the company projects itself as a less risky share and thus also gaining investors faith. The investors buy its shares and thus increase
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POLICY AT LINEAR TECHNOLOGY Conceptualización del problema En el 1981 Linear Technology fue fundada por Rober Sawson en California, esta compañía se dedica a diseñar, fabricar y comercializar circuitos integrados. Por capitalización de mercado Linear ocupa el séptimo lugar dentro de su segmento. En 1986 Linear empezó a cotizar en NASDAQ y desde ahí ha dividido sus acciones cuatro veces. Dentro de los datos financieros del año fiscal se destaca el crecimiento sostenido que presenta Linear entre
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