security valuation problems (as in Myers and Majluf (1984)) does a good job of explaining the main features of observed payout policies — i.e.‚ the massive size of corporate payouts‚ their timing and‚ to a lesser degree‚ their (dividend versus stock repurchase) form. We also conclude that managerial signaling motives‚ clientele demands‚ tax deferral benefits‚ investors’ behavioral heuristics‚ and investor sentiment have at best minor influences on payout policy‚ but that behavioral biases at the managerial
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or two. False. Dividends are “smoothed.” Managers rarely increase regular dividends temporarily. They may pay a special dividend‚ however. d. Companies undertaking substantial share repurchases usually finance them with a offsetting reduction in cash dividends. False. Dividends are rarely cut when repurchases are being made. 17. Dividends and value – Little Oil has outstanding 1 million shares with a total market value of $20 million. The firm is expected to pay $1 million of dividends next
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on Torstar’s dividend policy‚ their repurchases and their strategy with regards to strategic acquisitions within their three business areas was composed. The memorandum included pros and cons as well as recommendations with regards to the issues to be discussed when the board gathered for their meeting. The dividend policy and the share repurchase strategy are the main issues since the institutional shareholders preferred Torstar’s historical share repurchases and historical dividend pay outs. Management
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Dividend Policy at FPL Group FPL Group Overview: The FPL Group was Florida’s largest electric utility group and the fourth largest in America. The FPL Group had annual revenues of exceeding $5 billion. Florida Power & Light Company‚ the main subsidiary of the FPL Group had 3.9 million customer accounts and covered a service area that included six of America’s ten fastest growing metropolitan areas. a. Summarize the key elements of FPL’s financial policy and compare it with other relevant
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statement Risk determinants Credit rating agencies take a wide range of factors – debt raising purpose‚ industry outlook‚ corporate profile and financial measures into account when performing corporate bond rating service. Debt is raised to repurchase shares rather than the normal case of capturing expansion opportunities to strengthen cash flow. This is not going to be regarded favorable to debt holders since the debt coverage ability in terms of cash or collateral is not strengthened. UST is
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per share (by a share repurchase). Leverage can increase a firm’s expected earnings per share. An argument is that by doing so‚ leverage should also increase the firm’s stock price. Because BBBY has no debt‚ they pay no interest‚ and because in perfect capital markets there are no taxes‚ BBBY’s earnings would equal its EBIT. If BBBY has new debt‚ they will have interest payments each year‚ so their earnings will decrease (EBIT – interest). If BBBY uses the debt to repurchase shares‚ the number of
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Target Corporation‚ Target‚ is an exclusive retail discounter that provides on-trend‚ high quality merchandise at competitive prices in orderly and expansive guest-friendly stores. In addition to the retail stores‚ Target operates an online business‚ Target.com (Target.com‚ 2012). Target Corporation (NYSE:TGT) assists customers at 1‚763 stores across the United States and also at Target.com. In 2013 the organization is planning to open their first stores in Canada. In addition to the retail segment
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words‚ repurchasing reserves financial flexibility relative to dividend. In fact‚ the study of …‚ company with higher operating cashflow are likely to increase dividend‚ while company with higher non operating cash flow are more likely to increase repurchase. In our case‚ the G corporation had negative growth of annual cash flow in the last 5 years‚ which means‚ the follow the share repurchasing program‚ the firm needed to make an additional finance from outside share buyback reduces company equity
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2 Active Investor Strategy 2 Effects of $3 Billion in New Debt for Dividend or Stock Repurchase 2 a. Outstanding Shares 2 b. Book Value of Equity 2 c. Price per Share 2 d. Earnings per Share 3 e. Debt Interest Coverage Rations and Financial Flexibility 3 f. Outstanding Shares 3 Wrigley’s Current Weighted Average Cost of Capital (WACC) 4 Debt Proceeds to Pay a Dividend or Repurchase Shares 4 Wrigley’s Recapitalization 5 Appendices 5 i. Objectives This report
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GLO-BUS Participant’s Guide (somewhat) at a Glance Company Operations: • Main office: Taiwan Regional Sales Offices in Milan‚ Brazil‚ Toronto‚ Singapore Focus is company sales & promotion and support merchandising of retailers Retailers maintain ample inventories to satisfy demand • Seasonal Production and Seasonal Demand Sales: 20% in each Q1-3 40% in Q4 • Retailers place orders 90 days in advance of expected sales. Assembly:
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