Principles of Corporate Finance

Dividend Payments Cash Dividend - Payment of cash by the firm to its shareholders. Ex-Dividend Date - Date that determines wheth ...

Dividend Payments Stock Dividend - Distribution of additional shares to a firm’s stockholders. ...

Dividend Payments Stock Dividend - Distribution of additional shares to a firm’s stockholders. Stock Splits - Issue of additiona ...

Dividend Payments Stock Dividend - Distribution of additional shares to a firm’s stockholders. Stock Repurchase - Firm buys back ...

Stock Repurchases 0 . . . . . . . 1985198619871988198919901991199219931994199519961997 $ Billions U.S. Stock Repurchases 1985-19 ...

Dividend Payments Aug 14 Aug 25 Aug26 Sept 1 Sept 15 Declaration With- Ex-dividend Record Payment date dividend date date date d ...

The Dividend Decision Firms have longer term target dividend payout ratios. Managers focus more on dividend changes than on abs ...

The Dividend Decision w Attitudes concerning dividend targets vary w Dividend Change 1 1 target ratio EPS DIV target dividend = ...

The Dividend Decision w Dividend changes confirm the following: ( 1 0 ) 1 0 adjustment rate target ratio EPS - DIV DIV - DIV adj ...

Dividend Policy -15 -10 -5 0 5 10 15 Div RiseDiv Cut Source: Healy & Palepu (1988) Change EPS/Price at t = 0 as % Year Impac ...

Dividend Policy is Irrelevant w Since investors do not need dividends to convert shares to cash they will not pay higher prices ...

Dividend Policy is Irrelevant Example - Assume Rational Demiconductor has no extra cash, but declares a $1,000 dividend. They al ...

Dividend Policy is Irrelevant Example - Assume Rational Demiconductor has no extra cash, but declares a $1,000 dividend. They al ...

Dividend Policy is Irrelevant Example - Assume Rational Demiconductor has no extra cash, but declares a $1,000 dividend. They al ...

Dividend Policy is Irrelevant Example - continued - Shareholder Value Record Stock 12,000 Cash 0 Total Value 12,000 Stock = 1,00 ...

Dividend Policy is Irrelevant Example - continued - Shareholder Value Record Pmt Stock 12,000 11,000 Cash 0 1,000 Total Value 12 ...

Dividend Policy is Irrelevant Example - continued - Shareholder Value Record Pmt Post Stock 12,000 11,000 12,000 Cash 0 1,000 0 ...

Dividends Increase Value Market Imperfections and Clientele Effect There are natural clients for high-payout stocks, but it does ...

Dividends Increase Value Dividends as Signals Dividend increases send good news about cash flows and earnings. Dividend cuts sen ...

Dividends Decrease Value Tax Consequences Companies can convert dividends into capital gains by shifting their dividend policies ...