EMI GROUP PLC Teaching Note Synopsis This case examines the April 2007 decision of British music company EMI to suspend its annual dividend as the company struggled to respond to the effect of digital audio distribution on its core business. The EMI case is intended to serve as an engaging introduction to corporate financial policy and themes in managing the right side of the balance sheet. The case contrasts EMI’s storied success with artists such as the Beatles‚ the Beach Boys‚ Pink Floyd
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Case 19 Georgia Atlantic Company Dividend Policy CASE INFORMATION Purpose The purpose of this case is to have students examine dividend policy--cash dividends‚ stock splits‚ and stock dividends--from the viewpoint of its effect on corporate share prices. Time Required About one and a half hours of student preparation. If the case is to be written up and handed in‚ double the time required. Complexity A--relatively simple. Flexibility This case can be used in
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earnings. Retained earnings are determined by dividend payout. The spreadsheet sets ROE at 15% for the five years from 2006 to 2010. If Reeby Sports will lose its competitive edge by 2011‚ then it cannot continue earning more than its 10% cost of capital. Therefore ROE is reduced to 10% starting in 2011. The payout ratio is set at .30 from 2006 onwards. Notice that the long-term growth rate‚ which settles in between 2011 and 2012‚ is ROE × ( 1 – dividend payout ratio ) = .10 × (1 - .30) = .07.
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GROUP PLC FEDERICO NOBILI History of EMI ▪ In 1897 Emile Berliner‚ inventor of the gramophone‚ co-founded the UK Gramophone Company in London ▪ In 1931 the merger between the Gramophone Company and Columbia Records formed the Electric and Music Industries Ltd ▪ In 1955 EMI entered the American market acquiring Capitol Records‚ the leading American record label ▪ In 1971 the company changed its name in EMI Ltd ▪ In 1980 EMI merged with Thorn Electrical Industries Ltd‚ to form Thorn EMI ▪ In 1992
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paid a dividend of $1.40 per share. Dividends are expected to grow at a rate of 5% per year for the foreseeable future. If the required return is 10%‚ what is the value of one share of the company’s stock. 2. Superior Enterprises has just paid a dividend of $1.05 and will pay $1.10 next year. Dividends are expected to grow at a constant rate indefinitely. What is the required rate of return if the stock is selling for $30 today? 3. Junkies Corporation has just paid a dividend of $0
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There are some stock valuation methods that we can use in valuing company’s stock. For instance: Discounted Cash Flow Model (DCFM)‚ Dividend Discount Model (DDM) and Earnings Growth Model (EGM).DDM is the valuation method that we use in this paper. 2.2 Problem Statement and Objective This research is mainly to value Public Bank Bhd stock through Dividend Discount Model (DDM). 2.3 Research Question * What is the value of Public Bank Bhd stock? * Is Public Bank Bhd stock
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Testing the Predictive Power of Dividend Yields William N. Goetzmann; Philippe Jorion The Journal of Finance‚ Vol. 48‚ No. 2. (Jun.‚ 1993)‚ pp. 663-679. Stable URL: http://links.jstor.org/sici?sici=0022-1082%28199306%2948%3A2%3C663%3ATTPPOD%3E2.0.CO%3B2-7 The Journal of Finance is currently published by American Finance Association. Your use of the JSTOR archive indicates your acceptance of JSTOR ’s Terms and Conditions of Use‚ available at http://www.jstor.org/about/terms.html. JSTOR ’s Terms
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characteristic of preferred stock EXCEPT A) callable. B) no maturity date. C) tax-deductible dividends. D) convertible. Answer: c If a firm has class A and class B common stock outstanding‚ it means that A) each class receives a different dividend. B) the par value of each class is different. C) the dividend paid to one of the classes is tax deductible by the corporation. D) one of the classes is probably non-voting
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the groceries‚ food and retailing (WOOLWORTHS LIMITED (WOW) 2013). The aim of this report is to estimate and determine the dividend growth rate‚ stock return and current share price of Woolworths. Methods used for the estimation include dividend growth model‚ Capital Asset Pricing Model (CAPM) and Gordon’s Growth Model. The results of the estimation indicate that the dividend payments will continuous increasing in the future‚ the return on the company’s assets is reasonable and its share price is
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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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