DIVIDENDS & STOCK REPURCHASE - I Dr. Kulbir Singh ACF Term III 2013-14 IMT Nagpur • Shareholders love it. • Bondholders hate it. • Managers consider it obvious. • Financial economists find it puzzling. • What is it? • Dividends; what else?! INTRODUCTION Dividend has been defined u.s. Sec 2 (14A) of the Companies Act, 1956 Dividend payment by Indian Companies are regulated by Sec 205 of Companies Act, 1956 Dividend is distribution of divisible or distributable profits of a company among
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Why are stocks repurchases the best payout alternative method? Willie Reddic Table of Contents 1.0 Introduction.……............................................................................................................3 2.0 Beginning Literature of Dividends and the Movement towards Repurchases .......3 3.0 Methods of Repurchases and Key Definition ...............................................................4 4.0 The Positives and Negatives on Methods of Repurchases ……............
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Global Markets Liability Strategies Group February 2006 Corporate Dividend Policy Authors Henri Servaes Professor of Finance London Business School The Theory and Practice of Corporate Dividend and Share Repurchase Policy Peter Tufano Sylvan C. Coleman Professor of Financial Management Harvard Business School Editors James Ballingall Capital Structure and Risk Management Advisory Deutsche Bank +44 20 7547 6738 james.ballingall@db.com Adrian Crockett Head of Capital Structure
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Share Repurchase: Is it good or bad? Financial Strategy (BMBA715.2) Date: 27th March 2013 Tutor: Mark Pilkington Author: Nandkumar Mahajan (136866461) Word Count: 3069 Table of Contents Executive Summary ......................................................................................
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buyback: Open market repurchases and employee options Kathleen M. Kahle* Katz Graduate School of Business, University of Pittsburgh, Pittsburgh, PA 15260, USA (Received 20 September 2000; accepted 6 June 2001) Abstract This paper examines how stock options affect the decision to repurchase shares. Firms announce repurchases when executives have large numbers of options outstanding and when employees have large numbers of options currently exercisable. Once the decision to repurchase is made, the amount
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rather a firm pays you a lot of dividends or would you rather simply earn capital gains? In other words, would you rather your return for investing in a firm’s stock come from quarterly cash dividends or stock price appreciation? Why? If I had to choose dividends or stock price appreciation, I would prefer a stock repurchase. When a company buys back shares, investor`s ownership percentage rises without any tax consequences. Unlike a cash dividend, a stock repurchase gives the decision to the investor
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split its stock four times since its Initial Public Offering (IPO). Linear’s first dividend was declared on October 13th, 1992. Coghlan (Linear’s CFO) explained that the company had a positive cash flow since their IPO. He further posits that paying a dividend would signal to investors that buying shares in Linear was not as risky as buying shares in most other technology companies. Furthermore, offering a dividend would give Linear access to a new set of investors with varying
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shareholders via cash dividends or share repurchases, is of critical concern for financial managers because of disagreements between management, investors, and financial academia on optimal policy. Payout policy decisions are often based upon key factors such as industry trends and behavior, decisions of benchmark competitors, and the predictability of future cash flows and sustainability. Linear Technology uses regular quarterly dividends, and share repurchases as opposed to special dividends to maintain
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being paid dividends. A firm can buy back some of its shares with the advantage being that most investors are not taxed as heavily on shares sold as they are on dividends received.(The Dividend Puzzle) Any increase in the dividend that is not financed by external financing will hurt creditors. Any money that is payed out in dividends is lost to the creditors if trouble develops. Repurchases are an efficient way to reduce agency costs of free cash flow, like dividends, but repurchases increase
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Fahad Sohail Table of Contents Blaine Kitchenware capital structure and payout policy 2 Advantages and Disadvantages of share repurchase move 2 New proposal by CEO TO repurchase stocks from the market and its analysis 3 Recommendation to the CEO as a family member and as an independent consultant 3 How does the proposal differ from paying a special dividend of $4.39 share instead? 4 Blaine Kitchenware capital structure and payout policy Blaine Kitchenware Inc.’s current capital structure
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