chap015公司理财 课件.pptVIP

Topics Covered How Companies Pay Cash to Shareholders Dividend Payments Stock Repurchases How Do Companies Decide on The Payout? Why Payout Policy Should Not Matter Why Dividends May Increase Firm Value Why Dividends May Reduce Firm Value Dividend Payments Dividend Payments Dividend Stock Repurchases Dividend Payments Dividend Payments Stock Dividend Stock Dividend Example - cont - After the stock dividend what is the new price per share and what is the new value of the firm? Answer The value of the firm was 2 mil x $15 per share, or $30 mil. After the dividend the value will remain the same. Price per share = $30 mil / 3 mil sh = $10 per sh. Stock Repurchase Stock Repurchase Stock Repurchase The Dividend Decision 1. Firms have longer term target dividend payout ratios. 2. Managers focus more on dividend changes than on absolute levels. 3. Dividends changes follow shifts in long-run, sustainable levels of earnings rather than short-run changes in earnings. 4. Managers are reluctant to make dividend changes that might have to be reversed. Dividend Policy is Irrelevant Since investors do not need dividends to convert shares to cash they will not pay higher prices for firms with higher dividend payouts. In other words, dividend policy will have no impact on the value of the firm. Dividend Policy is Irrelevant Example - Assume Rational Demiconductor has no extra cash, but declares a $1,000 dividend. They also require $1,000 for current investment needs. Using MM Theory, and given the following balance sheet information, show how the value of the firm is not altered when new shares are issued to pay for the dividend. Record Date Cash 1,000 Asset Value 9,000 Total Value 10,000 + New Proj NPV 2,000 # of Shares 1,000 price/share $12 Dividend Policy is Irrelevant Example - Assume Rational Demiconductor has no extra cash, but declares a $1,000 dividend. They also require $1,000 for current investment needs. Using MM Theory, and gi