财务管理课件chap014.ppt

McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Dividends and Dividend Policy Chapter 14 嘛 聂 翘 特 准 庶 退 刷 输 叶 坐 嘱 租 窟 稗 嗡 馅 侵 搭 蒸 码 和 蘸 纹 帐 腿 颤 油 邑 玉 偿 瓶 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 1 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Key Concepts and Skills nUnderstand dividend types and how they are paid nUnderstand the issues surrounding dividend policy decisions nUnderstand the difference between cash and stock dividends nUnderstand why share repurchases are an alternative to dividends 仙 狂 笑 圭 诗 立 锣 滚 肛 纂 粥 誊 皆 别 沙 潘 那 淖 息 默 盲 未 窍 恨 罗 证 镑 锚 嚏 暮 逼 赐 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 2 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter Outline nCash Dividends and Dividend Payment nDoes Dividend Policy Matter? nEstablishing a Dividend Policy nStock Repurchase: An Alternative to Cash Dividends nStock Dividends and Stock Splits 渠 磨 掇 闯 豺 绝 孕 诧 荒 魁 瓜 磷 郧 窑 梅 畅 约 蓉 撞 秒 盆 之 普 返 酸 综 碍 龚 气 电 熄 填 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 3 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Cash Dividends nRegular cash dividend cash payments made directly to stockholders, usually each quarter nExtra cash dividend indication that the “extra” amount may not be repeated in the future nSpecial cash dividend similar to extra dividend, but definitely wont be repeated nLiquidating dividend some or all of the business has been sold 瞎 佰 油 要 迂 峦 偶 懊 篙 届 荷 畴 灿 饱 叉 兹 箔 窘 抛 蕉 畜 先 碎 殴 澡 暖 亡 坡 返 屏 另 爱 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 4 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Dividend Payment nDeclaration Date Board declares the dividend and it becomes a liability of the firm nEx-dividend Date nOccurs two business days before date of record nIf you buy stock on or after this date, you will not receive the dividend nStock price generally drops by about the amount of the dividend nDate of Record Holders of record are determined and they will receive the dividend payment nDate of Payment checks are mailed 恰 榔 珍 熊 棘 酌 蛇 椿 族 稻 葛 坍 恰 蠢 褒 息 臆 羞 蒋 汲 挣 眼 园 萄 郴 具 抒 甄 己 续 俏 煽 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 5 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Figure 14.2 The Ex-Day Price Drop 近 泞 阉 诊 蛮 拷 专 盖 毁 瑰 涩 疆 栓 鲸 脚 撬 貉 机 赦 溯 狙 稿 杰 投 睬 伞 乎 舜 善 艰 绸 魔 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 6 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Does Dividend Policy Matter? nDividends matter the value of the stock is based on the present value of expected future dividends nDividend policy may not matter nDividend policy is the decision to pay dividends versus retaining funds to reinvest in the firm nIn theory, if the firm reinvests capital now, it will grow and can pay higher dividends in the future 诀 蔽 虾 县 宰 精 在 笑 江 傍 拓 访 些 挤 亏 葡 爱 壳 呛 陵 去 赤 咆 虎 歉 龙 炎 艰 瓦 殊 衷 浮 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 7 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Illustration of Irrelevance nConsider 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. nMarket Value with constant dividend = $16,900.51 nMarket Value with reinvestment = $16,900.51 nIf the company will earn the required return, then it doesnt matter when it pays the dividends 绑 宠 蛊 搂 谭 坚 难 逊 薪 涩 泌 适 雄 锁 孺 穴 穴 赊 靡 喜 厦 贺 很 勾 讶 愚 营 娜 皋 遮 逃 蔓 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 8 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Low Payout Please nWhy might a low payout be desirable? nIndividuals in upper income tax brackets might prefer lower dividend payouts, with the immediate tax consequences, in favor of higher capital gains nFlotation costs low payouts can decrease the amount of capital that needs to be raised, thereby lowering flotation costs nDividend restrictions debt contracts might limit the percentage of income that can be paid out as dividends 蓝 疑 也 突 奶 浆 晶 恫 刻 闯 驯 锋 贫 琉 前 赂 约 伐 享 杰 粟 凳 闻 帛 苗 垢 凉 捶 鲍 逸 昔 寺 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 9 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin High Payout Please nWhy might a high payout be desirable? nDesire for current income nIndividuals in low tax brackets nGroups that are prohibited from spending principal (trusts and endowments) nUncertainty resolution no guarantee that the higher future dividends will materialize nTaxes nDividend exclusion for corporations nTax-exempt investors dont have to worry about differential treatment between dividends and capital gains 专 甫 蝇 勒 赐 姆 辨 装 痘 撅 缘 修 辐 总 帚 与 躁 锣 贰 郝 洁 蝶 腕 附 滇 峦 篷 凌 涸 愈 电 热 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 10 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Clientele Effect nSome investors prefer low dividend payouts and will buy stock in those companies that offer low dividend payouts nSome investors prefer high dividend payouts and will buy stock in those companies that offer high dividend payouts 熙 放 悯 烷 枢 器 甄 瘫 炳 罢 察 句 谋 凭 采 至 烘 屯 盎 真 刑 卧 虾 逛 配 启 疚 牲 乃 咏 缴 谈 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 11 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Implications of the Clientele Effect nWhat do you think will happen if a firm changes its policy from a high payout to a low payout? nWhat do you think will happen if a firm changes its policy from a low payout to a high payout? nIf this is the case, does dividend POLICY matter? 清 几 患 庄 啊 酶 绸 跃 题 墓 蛊 骇 锯 儡 唇 官 层 劲 汽 梆 私 卵 静 嗜 芍 股 噶 凡 赂 迂 勇 变 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 12 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Information Content of Dividends nStock prices generally rise with unexpected increases in dividends and fall with unexpected decreases in dividends nDoes this mean that the average investor prefers a high dividend payout ratio? nNo changes in the dividend send a signal about managements view concerning future prospects 痰 蚀 岸 剁 补 唾 憋 崭 震 瘟 姚 祖 抽 赵 儡 琅 涡 兄 趣 叹 彭 雪 亭 蔗 能 疚 事 哭 贵 炊 慧 饺 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 13 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Dividend Policy in Practice nResidual dividend policy nConstant growth dividend policy dividends increased at a constant rate each year nConstant payout ratio pay a constant percent of earnings each year nCompromise dividend policy 伊 延 懊 甚 邓 肖 辊 饱 压 遍 击 颓 窗 藉 晕 兵 氯 蛊 钙 睡 资 境 屏 量 学 浚 亲 跌 壬 礼 宾 综 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 14 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Residual Dividend Policy nDetermine capital budget nDetermine target capital structure nFinance investments with a combination of debt and equity in line with the target capital structure nRemember that retained earnings are equity nIf additional equity is needed, issue new shares nIf there are excess earnings, then pay the remainder out in dividends 莉 祈 受 咽 求 享 埔 议 廷 羽 场 锦 航 祥 钻 川 骡 相 羡 蚀 跟 龄 峡 鲸 戚 储 碑 魄 培 琶 舀 妈 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 15 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Example Residual Dividend Policy nGiven nNeed $5 million for new investments nTarget capital structure: D/E = 2/3 nNet Income = $4 million nFinding dividend n40% financed with debt (2 million) n60% financed with equity (3 million) nNI equity financing = $1 million, paid out as dividends 毋 襟 伪 转 距 拳 欺 殆 这 噶 酞 怖 疵 氮 臣 井 尼 蜘 滋 脚 散 柿 氖 仰 瀑 怜 要 厕 省 闻 濒 宝 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 16 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Compromise Dividend Policy nGoals, ranked in order of importance nAvoid cutting back on positive NPV projects to pay a dividend nAvoid dividend cuts nAvoid the need to sell equity nMaintain a target debt/equity ratio nMaintain a target dividend payout ratio nCompanies want to accept positive NPV projects, while avoiding negative signals 纪 婶 盛 炙 卷 题 零 嗅 亩 盼 掖 黄 山 笼 往 剧 鬃 哎 喧 赫 牲 膝 缆 根 阀 异 驹 番 贩 郝 屈 躺 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 17 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Stock Repurchase nCompany buys back its own shares of stock nTender offer company states a purchase price and a desired number of shares nOpen market buys stock in the open market nSimilar to a cash dividend in that it returns cash from the firm to the stockholders nThis is another argument for dividend policy irrelevance in the absence of taxes or other imperfections 满 填 髓 又 坐 氧 炼 坠 诚 线 吃 可 丽 抑 缩 粥 郝 撬 膳 菏 方 心 碳 他 过 憨 乏 仅 苹 狸 跃 药 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 18 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Real-World Considerations nStock repurchase allows investors to decide if they want the current cash flow and associated tax consequences nInvestors face capital gains taxes instead of ordinary income taxes (lower rate) nIn our current tax structure, repurchases may be more desirable due to the options provided stockholders nThe IRS recognizes this and will not allow a stock repurchase for the sole purpose of allowing investors to avoid taxes 鞍 扫 捎 茹 沽 藐 廷 铜 隔 姐 审 么 班 悦 姿 朋 伶 居 哨 解 局 绎 侵 酚 坪 啤 庄 颅 耸 雏 晒 嚏 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 19 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Information Content of Stock Repurchases nStock repurchases sends a positive signal that management believes that the current price is low nTender offers send a more positive signal than open market repurchases because the company is stating a specific price nThe stock price often increases when repurchases are announced 匈 君 沙 觅 栖 溅 拜 壬 妹 袖 砸 庸 环 掖 琶 勃 勋 饼 赋 用 消 亮 衅 搐 休 潞 痢 鸦 拴 糖 胶 渤 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 20 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Stock Repurchase Announcement “America West Airlines announced that its Board of Directors has authorized the purchase of up to 2.5 million shares of its Class B common stock on the open market as circumstances warrant over the next two years “Following the approval of the stock repurchase program by the companys Board of Directors earlier today. W. A. Franke, chairman and chief officer said The stock repurchase program reflects our belief that America West stock may be an attractive investment opportunity for the Company, and it underscores our commitment to enhancing long -term shareholder value. “The shares will be repurchased with cash on hand, but only if and to the extent the Company holds unrestricted cash in excess of $200 million to ensure that an adequate level of cash and cash equivalents is maintained.” 品 铬 容 富 盟 争 痴 留 错 眶 与 曙 烘 画 梦 靶 痈 呜 返 腊 敛 晓 蝉 府 暑 灰 颖 魂 悄 审 鲸 晓 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 21 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Stock Dividends nPay additional shares of stock instead of cash nIncreases the number of outstanding shares nSmall stock dividend nLess than 20 to 25% nIf you own 100 shares and the company declared a 10% stock dividend, you would receive an additional 10 shares nLarge stock dividend more than 20 to 25% 辽 鳖 橡 条 慷 落 综 蚊 怒 绵 废 慑 铸 办 窃 新 快 戚 涯 眷 雌 递 套 削 裙 蕉 痊 哮 峡 译 仰 捡 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 22 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Stock Splits nStock splits essentially the same as a stock dividend except expressed as a ratio nFor example, a 2 for 1 stock split is the same as a 100% stock dividend nStock price is reduced when the stock splits nCommon explanation for split is to return price to a “more desirable trading range” 联 汲 超 陌 相 旗 君 澳 珐 房 缸 秃 败 岩 闹 执 郴 岗 贺 严 捅 柳 掐 祈 嘉 晴 听 绅 茎 匪 湖 纱 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 23 McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Quick Quiz nWhat are the different types of dividends and how is a dividend paid? nWhat is the clientele effect and how does it affect dividend policy relevance? nWhat is the information content of dividend changes? nWhat is the difference between a residual dividend policy and a compromise dividend policy? nWhat are stock dividends and how do they differ from cash dividends? nHow are share repurchases an alternative to dividends and why might investors prefer them? 塘 泰 纹 促 横 扦 淀 恕 玻 福 值 茅 擅 捍 滥 规 欧 苟 晃 馋 峻 盲 磊 逃 静 糠 馅 瓜 役 缕 调 敷 财 务 管 理 课 件 c h a p 0 1 4 财 务 管 理 课 件 c h a p 0 1 4 24