taiwan财务管理_lecture16(ch16)

©TheMcGraw-HillCompanies,Inc.,200116-1Irwin/McGraw-HillIrwin/McGraw-HillChapter16FundamentalsofCorporateFinanceThirdEditionDividendPolicyBrealeyMyersMarcusslidesbyMatthewWillIrwin/McGraw-Hill©TheMcGraw-HillCompanies,Inc.,2001©TheMcGraw-HillCompanies,Inc.,200116-2Irwin/McGraw-HillTopicsCoveredHowDividendsarePaidHowDoCompaniesDecideonDividendPaymentsWhyDividendPolicyShouldNotMatterWhyDividendsMayIncreaseFirmValueWhyDividendsMayReduceFirmValue©TheMcGraw-HillCompanies,Inc.,200116-3Irwin/McGraw-HillDividendPaymentsRecordDate-Personwhoownsstockonthisdatereceivedthedividend.Ex-DividendDate-Datethatdetermineswhetherastockholderisentitledtoadividendpayment;anyoneholdingstockbeforethisdateisentitledtoadividend.CashDividend-Paymentofcashbythefirmtoitsshareholders.©TheMcGraw-HillCompanies,Inc.,200116-4Irwin/McGraw-HillDividendPaymentsStockRepurchase-Firmbuysbackstockfromitsshareholders.StockDividend-Distributionofadditionalsharestoafirm’sstockholders.StockSplits-Issueofadditionalsharestofirm’sstockholders.©TheMcGraw-HillCompanies,Inc.,200116-5Irwin/McGraw-HillDividendPaymentsJul28Aug10Aug11Aug13Sept10DeclarationWith-Ex-dividendRecordPaymentdatedividenddatedatedatedateSharepricefalls©TheMcGraw-HillCompanies,Inc.,200116-6Irwin/McGraw-HillStockDividendExample-AmoebaProductshas2millionsharescurrentlyoutstandingatapriceof$15pershare.Thecompanydeclaresa50%stockdividend.Howmanyshareswillbeoutstandingafterthedividendispaid?Answer2milx.50=1mil+2mil=3milshares©TheMcGraw-HillCompanies,Inc.,200116-7Irwin/McGraw-HillStockDividendExample-cont-Afterthestockdividendwhatisthenewpricepershareandwhatisthenewvalueofthefirm?AnswerThevalueofthefirmwas2milx$15pershare,or$30mil.Afterthedividendthevaluewillremainthesame.Pricepershare=$30mil/3milsh=$10persh.©TheMcGraw-HillCompanies,Inc.,200116-8Irwin/McGraw-HillStockRepurchaseAssetsLiabilities&EquityA.OriginalbalancesheetCash$150,000Debt0Otherassets850,000Equity1,000,000ValueofFirm1,000,000ValueofFirm1,000,000Sharesoutstanding=100,000Pricepershare=$1,000,000/100,000=$10Example-Cashdividendversussharerepurchase©TheMcGraw-HillCompanies,Inc.,200116-9Irwin/McGraw-HillStockRepurchaseAssetsLiabilities&EquityB.AftercashdividendCash$50,000Debt0Otherassets850,000Equity900,000ValueofFirm900,000ValueofFirm900,000Sharesoutstanding=100,000Pricepershare=$900,000/100,000=$9Example-Cashdividendversussharerepurchase©TheMcGraw-HillCompanies,Inc.,200116-10Irwin/McGraw-HillStockRepurchaseAssetsLiabilities&EquityC.AfterstockrepurchaseCash$50,000Debt0Otherassets850,000Equity900,000ValueofFirm900,000ValueofFirm900,000Sharesoutstanding=90,000Pricepershare=$900,000/90,000=$10Example-Cashdividendversussharerepurchase©TheMcGraw-HillCompanies,Inc.,200116-11Irwin/McGraw-HillTheDividendDecision1.Firmshavelongertermtargetdividendpayoutratios.2.Managersfocusmoreondividendchangesthanonabsolutelevels.3.Dividendschangesfollowshiftsinlong-run,sustainablelevelsofearningsratherthanshort-runchangesinearnings.4.Managersarereluctanttomakedividendchangesthatmighthavetobereversed.Lintner’s“StylizedFacts”(HowDividendsareDetermined)©TheMcGraw-HillCompanies,Inc.,200116-12Irwin/McGraw-HillDividendPolicyisIrrelevantExample-AssumeABCCo.hasnoextracash,butdeclaresa$1,000dividend.Theyalsorequire$1,000forcurrentinvestmentneeds.UsingM&MTheory,andgiventhefollowingbalancesheetinformation,showhowthevalueofthefirmisnotalteredwhennewsharesareissuedtopayforthedividend.RecordDatePmtDatePostPmtCash1,00001,000(40sh@$25)AssetValue5,0005,0005,000TotalValue6,0005,0006,000#ofShares200200240price/share$30$25$25NEWSHARESAREISSUED©TheMcGraw-HillCompanies,Inc.,200116-13Irwin/McGraw-HillDividendPolicyisIrrelevantExample-continued-ShareholderValueRecordPmtPostStock6,0005,0006,000Cash01,0000TotalValue6,0006,0006,000Stock=240sh@$25=6,000Assumestockholderspurchasethenewissuewiththecashdividendproceeds.©TheMcGraw-HillCompanies,Inc.,200116-14Irwin/McGraw-HillDividendsIncreaseValueMarketImperfectionsandClienteleEffectTherearenaturalclientsforhigh-payoutstocks,butitdoesnotfollowthatanyparticularfirmcanbenefitbyincreasingitsdividends.Thehighdividendclientelealreadyhaveplentyofhighdividendstocktochoosefrom.Theseclientsincreasethepriceofthestockthroughtheirdemandforadividendpayingstock.©TheMcGraw-HillCompanies,Inc.,200116-15Irwin/McGraw-HillDividendsIncreaseValueDividendsasSignalsDividendincreasessendgoodnewsaboutcashflowsandearnings.Dividendcutssendbadnews.Becauseahighdividendpayoutpolicywillbecostlytofirmsthatdonothavethecashflowtosupportit,dividendincreasessignalacompany’sgoodfortuneanditsmanager’sconfidenceinfuturecashflows.©TheMcGraw-HillCompanies,Inc.,200116-16Irwin/McGraw-HillDividendsDecreaseValueTaxConsequencesCompaniescanconvertdividendsintocapitalgainsbyshiftingtheirdividendpolicies.Ifdividendsaretaxedmoreheavilythancapitalgains,taxpayinginvestorsshouldwelcomesuchamoveandvaluethefirmmorefavorably.Insuchataxenvironment,thetotalcashflowretainedbythefirmand/orheldbyshareholderswillbehigherthanifdividendsarepaid.©TheMcGraw-HillCompanies,Inc.,200116-17Irwin/McGr