国际财务管理 .ppt

Chapter Outline
18.1 Different Types of Dividends 18.2 Standard Method of Cash Dividend Payment 18.3 The Benchmark Case: An Illustration of the
Irrelevance of Dividend Policy 18.4 Repurchase of Stock 18.5 Personal Taxes and Dividends 18.6 Real-World Factors Favoring a High Dividend
• Understand dividend types and how they are paid
• Understand the issues surrounding dividend policy decisions
• Understand why share repurchases are an alternative to dividends
Slide 10
Dividend Policy is Irrelevant
• In the above example, Bob Investor began with a total wealth of $3,360:
$3,360 80 shares $42 share
• After a $3 dividend, his total wealth is still $3,360:
Record Date – Date on which company determines existing shareholders.
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Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved
CHAPTER
18
Dividends and Other Payouts
McGraw-Hill/Irwin
Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved
Slide 2
Key Concepts and Skills
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Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved
Slide 9
Homemade Dividends
• Bianchi Inc. is a $42 stock about to pay a $2 cash dividend.
• In other words, dividend policy will have no impact on the value of the firm because investors can create whatever income stream they prefer by using homemade dividends.
-t … -2 -1 0
+1 +2 …
$P
$P - div
The price drops by the amount of
Exdividend
the cash dividend.
Date
Taxes complicate things a bit. Empirically, the
price drop is less than the dividend and occurs
Policy 18.7 The Clientele Effect: A Resolution of Real-World
Factors? 18.8 What We Know and Do Not Know about Dividend
Policy 18.9 Stock Dividends and Stock Splits
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Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved
Slide 11
Dividends and Investment Policy
• Firms should never forgo positive NPV projects to increase a dividend (or to pay a dividend for the first time).
$3,360 80 shares $39 $240 share
• After a $2 dividend and sale of 2 ex-dividend shares, his total wealth is still $3,360:
$3,360 78 shares $40 $160 $80 share
cremations.
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Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved
Slide 5
18.2 Standard Method of Cash Dividend
Cash Dividend - Payment of cash by the firm to its shareholders.
• A compelling case can be made that 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 dividends.
• Recall that one of the assumptions underlying the dividend-irrelevance argument is: “The investment policy of the firm is set ahead of time and is not altered by changes in dividend policy.”
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Slide 4
18.1 Different Types of Dividends
• Many companies pay a regular cash dividend.
Slide 6
Procedure for Cash Dividend
25 Oct.
…
1 Nov. 2 Nov.
5 Nov.
7 Dec.
Declaration Date
Cum-
Ex-
dividend dividend
Date
Date
Record Date
Payment Date
Declaration Date: The Board of Directors declares a payment of dividends. Cum-Dividend Date: Buyer of stock still receives the dividend.
– No cash leaves the firm. – The firm increases the number of shares outstanding.
• Some companies declare a dividend in kind.
– Wrigley’s Gum sends a box of chewing gum. – Dundee Crematoria offers shareholders discounted
• Understand the difference between cash and stock dividends
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Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved
Slide 3
– Public companies often pay quarterly. – Sometimes firms will pay an extra cash dividend. – The extreme case would be a liquidating dividend.
• Companies will often declare stock dividends.
McGraw-Hill/Irwin
Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved
Slide 7
Price Behavior
• In a perfect world, the stock price will fall by the amount of the dividend on the ex-dividend date.
$160
$240
Cash from selling stock
$80
$0
Total Cash
$240
$240
Value of Stock Holdings $40 × 78 = $39 × 80 =