Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
16 Cards in this Set
- Front
- Back
|
Cash Dividends
|
Paid Quarterly in US and SemiAnnually in UK
|
|
|
Cum Dividend
|
After Declaration, people can buy and still receive dividend
|
|
|
Ex - Dividend
|
After Dividend is paid, owners will not receive dividend
|
|
|
How much are Dividends
|
They can be increasing or proportional to Profits - usually bonuses are increased before dividends.
|
|
|
Special Dividends
|
Alternative Non-Cyclical Dividend Payment
|
|
|
BuyBacks
|
Share Repurchases, return surplus money to investors, increases value of remaining shares
|
|
|
Scrip Dividends
|
Offer additional shares per shares owned (ex 1 for every 10), coul have negative tax implications unfortunately
|
|
|
Factors influencing Dividend Policy
|
• Legal Requirements- If Dividend exceeds profits, then illegal • Retained Earnings - Same as cash, used to finance projects but could reduce dividend payments • Level of Gearing - Amount of Debt Finance, High gear low profits bc of interest payments • Could have fewer shareholders to increase EPS • Capital Structure - Debt / Equity allocation could influence policy
|
|
|
Dividend Relevance
|
Investors preofer certainty of Dividends to Uncertainty of Capital Gains • Dividends have tax Benefits too
|
|
|
Dividend Irrelevance
|
Shareholder wealth is determined by investment decisions, not dividend payouts (Assuimng Perfect Markets and No Taxes, and EMH)
|
|
|
Market Capitalization
|
Market Price X Outstanding Shares
|
|
|
Book Value
|
Net Assets / Issued Shares (assume going concern)
|
|
|
Adjusted Book Value
|
Same as BV, but takes account valuations of particular BS items such as Property and equipment that may have changed
|
|
|
DCF Valuation
|
NPV method, use WACC as discount factor for projected Cash Flows - DCF / Outstanding Shares = DCF Valuation
|
|
|
Dividend Valuation
|
Discount Expected Dividend by expected rate of return of Equity
|
|
|
Note on valuations
|
Buyers consdierations and valuations should trump all methods
|
