Describe Linear Technology’s payout policy

Slides:

Advertisements

Similar presentations

What is the Goal of the Company?

Advertisements

Chapter 13. Dividend Policy and Internal Financing.

1 Chapter 13 - Dividends Returns from price change and dividends Issues: payout ratio, dividend stability considering reinvestment opportunities and shareholder.

Classes-To-Go! 2B Dividends Matter! Shanna Rendon.

McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter Dividend Policy and Investment Decisions u Miller and Modigliani (M&M) Hypothesis u Assumptions u no taxes, transaction costs, or brokerage.

DIVIDENDS AND DIVIDEND POLICY Chapter 17. Dividend: cash paid out of earnings Distribution: cash payment from sources other than earnings Cash Dividends.

Chapter 13. Dilemma: Should the firm use retained earnings for: a) Financing profitable capital investments? b) Paying dividends to stockholders?

Dividend Policy “I tell you Wellington is a bad general, the English are bad soldiers: We will settle the matter by lunch time” –Napolean Bonaparte Waterloo,

14-1 Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

Chapter 15 Dividend Policy Professor XXXXX Course Name / # © 2007 Thomson South-Western.

Dividend Policy Overview Practical Aspects Practical Aspects Benchmarking: Irrelevance revisited Benchmarking: Irrelevance revisited Policy Policy.

Payout Policy Advanced Corporate Finance 2 October 2007.

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved 1 Chapter 17 Sharing Firm Wealth: Dividends, Share Repurchases, and Other Payouts.

1 Dividend Policy 11/19/07. 2 Learning Objectives Factors that influence dividend policy Factors that influence dividend policy How dividends are paid.

Module 8 Reporting and Analyzing Owner Financing Activities.

 2002, Prentice Hall, Inc.. Return = Capital Gain Dividend Yield += Stock Returns: P 1 - Po + D 1 Po P 1 - Po D 1 Po Po.

Payout Policy 1Finance - Pedro Barroso. Different Types of Dividends Many companies pay a regular cash dividend – Public companies often pay quarterly.

Revise Lecture 30. Dividend Policies & Decisions 1.Nature of dividend decisions? 2.Why investors want dividends? 3.Three main factors affecting dividends?

Dividends and Other Payouts. Dividend Irrelevant Theory Proposed by Miller and Modigliani Value of firm is determined by a firm’s ability in generating.

1 Chapter 13 - Dividends Returns from price change and dividends Issues: payout ratio, dividend stability considering reinvestment opportunities and shareholder.

Qinglei Dai for FEUNL, 2006 Finance I October 3. Qinglei Dai for FEUNL, 2006 Topics Covered  Stocks and the Stock Market  Book Values, Liquidation Values.

1 16. Understanding Accounting & Financial Statements.

We will begin with financial statements analysis The SEC requires all companies that sell securities to the public to disclose information about the company’s.

Types of distributions Cash dividends Repurchases Stock dividends Stock splits 1.

Profitability Ratios.

Learning Objectives Understand the Business – LO1 Explain the role of shares (also called stocks) in financing a corporation. Study the accounting methods.

1Chapter 13– Dividends, Repurchases, and Splits Professor James Kuhle DIVIDENDS, REPURCHASES, AND SPLITS Chapter 13.

Business Finance (MGT 232)

Investments: Analysis and Behavior Chapter 10- Financial Statement Analysis ©2008 McGraw-Hill/Irwin.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Chapter 2- Capital Structure Determination. After studying this chapter, you should be able to: Define “capital structure.” Explain the net operating.

Chapter 18-1 LO 5 Identify and compute ratios used in analyzing a firm’s liquidity, profitability, and solvency. Ratio Analysis Illustration.

Historical payout policy 1. Profitability vs. Investment Needs 2.

Financial Ratios Clicker Quiz. What is this ratio? Market Price Per Share Earnings Per Share A. Inventory Turnover B. Accounts Receivable Turnover C.

1 Review Questions 1.Over the last 30 years, the proportion of the market value of stocks held by pension funds has increased substantially. Holding everything.

Dividend Policy. Should the firm pay out money to its shareholders? Source of capital: debt, preferred stocks, common stocks, and retained earnings. If.

© 2003 The McGraw-Hill Companies, Inc. All rights reserved. Dividends and Dividend Policy Chapter Eighteen.

Prof. Roy Sembel, Ph.D LECTURE NOTE Prof. Roy Sembel, PhD

DIVIDEND THEORY CHAPTER 17. LEARNING OBJECTIVES  Highlight the issues of dividend policy  Critically evaluate why some experts feel that dividend policy.

©2009 McGraw-Hill Ryerson Limited 1 of Dividend Policy and Retained Earnings Prepared by: Michel Paquet SAIT Polytechnic ©2009 McGraw-Hill Ryerson.

Chapter 14 Dividend Policy © 2001 South-Western College Publishing.

Dividends and Dividend Policy. Dividend Definitions (Cash) Net Income Regular Cash Dividend Extra Dividend Special Dividend Asset SalesLiquidating Dividend.

1 Dividend Policy - Basics by Binam Ghimire. Learning Objectives  Forms of Dividend  Dividend Payment Chronology  Factors affecting Dividend Payment.

McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

 2005, Pearson Prentice Hall Chapter 17 – Dividend Policy and International Financing.

1 Press Ctrl-A ©G Dear2010 – Not to be sold/Free to use Value Shares Stage 6 - Year 11 Applied Mathematic (Preliminary General 1)

Dividend Theory. Issues in Dividend Policy Earnings to be Distributed – High Vs. Low Payout. Objective – Maximize Shareholders Return. Effects – Taxes,

CORP FINC Session 2 (MOOC) Fall Textbook: Chapter 19.

CHAPTER 9 VALUATION OF COMMON STOCKS. The Discounted Dividend Model (DDM) is defined as any model that computes the value of a share of stock as the present.

DEVRY FIN 516 Week 1 Homework Check this A+ tutorial guideline at For more classes visit.

Dividend Policy Payout Dividends or use the money to Buy-Back Shares?

Introduction to Accounting Preparing for a User’s Perspective

CHAPTER 13 DIVIDEND POLICY.

Electronic Presentation by Douglas Cloud Pepperdine University

Reporting and Interpreting Owners’ Equity

Walter’s Theory.

Mark Fielding-Pritchard

Corporate Finance Ross  Westerfield  Jaffe

Capital Structure Determination

Dividends and Dividend Policy

Chapter 16 Distribution Policy

LEARNING OBJECTIVES • Explain the rationale and conclusion of the ideas of Modigliani and Miller’s dividend irrelevancy hypothesis, as well as the concept.

Dividends and Other Payouts

Dividend Policy Payout Dividends or use the money to Buy-Back Shares?

FIN 360: Corporate Finance

Financial Statement Analysis

Capital Structure Decisions: Modigliani and Miller 1958 JF

Presentation transcript:

Describe Linear Technology’s payout policy Historical record of dividends and repurchases Dividends Total Per share Payout ratio Dividend yield Repurchases ($) Analyze Linear’s financing needs. Should Linear return cash to its shareholders? Profitability vis-à-vis investment needs Reasons for/against returning cash to shareholders Taxes ?????

If Linear were to pay out its entire cash balance as a special dividend, what would be the effect on the share price? On earnings? On number of shares outstanding? On earnings per share? What if Linear repurchased shares instead? Assume a Modigliani and Miller world: no taxes, no agency costs, perfect information, no transactions costs Assume the company will use $1.5 billion of cash. The cash earns 3% interest income if the company keeps it. Hint: Earnings for 2003 are only for the first 3 quarters. You need the earnings for the full year (i.e. 4 quarters) 2003.

Why do firms pay dividends? Refer to class notes What should Paul Coghlan recommend to the board?