On July 11‚ 1969‚ former CEO and founder Harland C. Stonecipher of Ada‚ Oklahoma was involved in a motor vehicle accident and was hospitalized. Although the other party was cited for fault‚ they had filed a suit against him for the accident.[3] He hired a lawyer to defend himself in court‚ but in doing so‚ depleted his life savings. After researching the industry of European legal expense plans‚ Stonecipher created Pre-Paid Legal’s predecessor‚ The Sportsman’s Motor Club‚ on August 8‚ 1972. The club
Premium Federal Trade Commission
analyses o Asset appraisal for capital budgeting o Asset appraisal for financial accounting o Performance assessments o M&A proposals and stock repurchase decisions ➢ 2002 Mortensen was asked to estimate cost of capital in connection with a large proposed share repurchase. 6 month later ‚ she was asked to corporate and divisional cost of capital ➢ After so many years her estimated became the de facto standard in many analyses. ➢ Once she realized
Premium Finance Investment Petroleum
bonus schemes are less sensitive to actual performance. Long-term incentive plans (LTIPs) don’t fare any better. There is evidence that their design is easily and regularly manipulated6 and that they handsomely reward average performance7. Executive share options (ESOs) might be expected to avoid all these problems. After all‚ they are surely very directly linked to the performance of CEOs and their top teams. Here‚ a different problem and interesting irony crops up. The more senior an executive‚ the
Premium Management Motivation Reward system
Summary of Facts September of 2005 Ashley Swenson is faced with preparing a recommendation on the restructuring of the dividend payout policy for Gainesboro Machine Tools Corporation. In the past few years the company has experienced a decrease in sales due to increased competition. With the recent development of the Artificial Workforce‚ the company is looking at making a positive turnaround. With the soon to come global expansion and the forecasted growth in sales brought by new innovations of
Premium Stock Dividend yield Dividend
CHAPTER 14 DISTRIBUTIONS TO SHAREHOLDERS: DIVIDENDS AND SHARE REPURCHASES (Difficulty: E = Easy‚ M = Medium‚ and T = Tough) Multiple Choice: Conceptual Easy: Dividends versus capital gains Answer: d Diff: E [i]. Myron Gordon and John Lintner believe that the required return on equity increases as the dividend payout ratio is decreased. Their argument is based on the assumption that a. Investors are indifferent between dividends and capital gains. b. Investors
Premium Dividend Dividend yield Stock market
CHAPTER 14: DISTRIBUTIONS TO SHAREHOLDERS: DIVIDENDS AND SHARE REPURCHASES 1. The optimal distribution policy strikes that balance between current dividends and capital gains that maximizes the firm’s stock price. a. True b. False ANSWER: True 2. Other things held constant‚ the higher a firm’s target payout ratio‚ the higher its expected growth rate should be. a. True b. False ANSWER: False RATIONALE: The higher the payout ratio‚ the less of its earnings the firm reinvests in the business
Premium Dividend Stock market Dividend yield
GAINESBORO MACHINE TOOLS CORPORATION Overview In mid September 2005‚ Ashley Swenson‚ the chief financial officer of this large CAD/CAM equipment manufacturer must decide whether to pay out dividends to the firm¡¦s shareholders or repurchase stock. If Swenson chooses to pay out dividends‚ she must also decide on the magnitude of the payout. A subsidiary question is whether the firm should embark on a campaign of corporate-image advertising and change its corporate name to reflect its new outlook
Premium Stock market Cash flow Discounted cash flow
Dell Computer Corporation – Share Repurchase Program Questions: 1. Why do companies use stock options to compensate employees? What are the advantages of stock options relative to cash compensation? What‚ if any‚ are their disadvantages? 2. What‚ if any‚ risks do Dell’s shareholders face from Dell’s stock option program? Draw terminal payoff diagrams to illustrate the risk. Is this risk something that shareholders of Dell expect to bear when investing in Dell? 3. How does Dell
Premium Management Marketing Computer
on Share Repurchase Proposal of Blaine Kitchenware Inc. Group 7 Contents Executive Summary 3 Overview of problems 3 Analysis on Capital Structure & Payout Policies of Blaine 3 1. Inappropriate current capital structure and payout policies 3 2. Advantages and disadvantages of large share repurchase proposal 4 a. Effects of share repurchase on assets‚ liabilities and equity on balance sheet 5 b. Effects of share repurchase on debt ratios and interest coverage ratio 5 c. Effects of share repurchase
Premium Dividend yield Stock market Stock
Stock repurchase is a special type of dividend. If there were no separate tax treatments between ordinary income and capital gains‚ and if a proportionate number of the shares were acquired from all stockholders‚ the economic effects would be almost identical for stock repurchase as for a cash dividend. If the stock is not acquired proportionately from all investors‚ stock repurchase is a special type of dividend‚ since it goes only to the stockholders who prefer cash compared to increased ownership
Free Tax Taxation Taxation in the United States