财务管理课件cha(4)PPT课件.pptVIP

Dividends and Dividend PolicyChapter 140 Key Concepts and SkillsUnderstand dividend types and how they are paidUnderstand the issues surrounding dividend policy decisionsUnderstand the difference between cash and stock dividendsUnderstand why share repurchases are an alternative to dividends1 Chapter OutlineCash Dividends and Dividend PaymentDoes Dividend Policy Matter?Establishing a Dividend PolicyStock Repurchase: An Alternative to Cash DividendsStock Dividends and Stock Splits2 Cash DividendsRegular cash dividend – cash payments made directly to stockholders, usually each quarterExtra cash dividend – indication that the “extra” amount may not be repeated in the futureSpecial cash dividend – similar to extra dividend, but definitely won’t be repeatedLiquidating dividend – some or all of the business has been sold3 Dividend PaymentDeclaration Date – Board declares the dividend and it becomes a liability of the firmEx-dividend DateOccurs two business days before date of recordIf you buy stock on or after this date, you will not receive the dividendStock price generally drops by about the amount of the dividendDate of Record – Holders of record are determined and they will receive the dividend paymentDate of Payment – checks are mailed4 Figure 14.2 The Ex-Day Price Drop5 Does Dividend Policy Matter?Dividends matter – the value of the stock is based on the present value of expected future dividendsDividend policy may not matterDividend policy is the decision to pay dividends versus retaining funds to reinvest in the firmIn theory, if the firm reinvests capital now, it will grow and can pay higher dividends in the future6 Illustration of IrrelevanceConsider a firm that can either pay out dividends of $10,000 per year for each of the next two years or can pay $9000 this year, reinvest the other $1000 into the firm and then pay $11,120 next year. Investors require a 12% return.Market Value with constant dividend = $16,900.51Market Value with reinvestment = $16,900.51If t