Beruflich Dokumente
Kultur Dokumente
19
McGraw-Hill/Irwin
19-2
Chapter Outline
19.1
19.2
19.3
1 Nov.
2 Nov.
5 Nov.
7 Dec.
Declaration
Date
ExCumdividend dividend
Date
Date
Record
Date
Payment
Date
Price Behavior
-t -2
-1
0
+1
+2
$P
$P - div
The price drops
Exby the amount of
dividend
Date
the cash
Taxes complicate things a bit. Empirically, the
dividend.
price drop is less than the dividend and occurs
within the first few minutes of the ex-date.
19-7
Homemade Dividends
homemade dividends
Cash from dividend
$160
Cash from selling stock
$80
Total Cash
$240
Value of Stock Holdings $40 78 =
$3,120
$3 Dividend
$240
$0
$240
$39 80 =
$3,120
19-9
$3,360 78 shares
$40
$160 $80
share
19-10
19-12
Cash
$150,000 Debt
0
Other Assets 850,000 Equity
1,000,000
Value of Firm 1,000,000 Value of Firm 1,000,000
Shares outstanding = 100,000
Price per share= $1,000,000 /100,000 = $10
19-13
$50,000
Debt
Other Assets
850,000
Equity
0
900,000
Liabilities& Equity
Cash
$50,000 Debt
0
Other Assets 850,000 Equity
900,000
Value of Firm 900,000 Value of Firm 900,000
Shares outstanding= 90,000
Price pershare = $900,000 / 90,000 = $10
19-15
Share Repurchase
19-16
No taxes
No transactions costs
No uncertainty
Cash: dividends
Taxes
Gov.
19-19
19-20
Tax Arbitrage
Agency Costs
Stock Type
Zero-to-Low payout
Low-to-Medium payout
Medium payout
High payout
Stock Splits
19-26
Quick Quiz
What are the different types of dividends, and how
is a dividend paid?
What is the clientele effect, and how does it affect
dividend policy irrelevance?
What is the information content of dividend
changes?
What are stock dividends, and how do they differ
from cash dividends?
How are share repurchases an alternative to
dividends, and why might investors prefer them?
19-27