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chap_14 - Chapter 14 DIVIDENDS AND DIVIDEND POLICY SLIDES...

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Chapter 14 DIVIDENDS AND DIVIDEND POLICY SLIDES CHAPTER WEB SITES Web sites may be referenced more than once in a chapter. This table just includes the section for the first reference. Chapter Section Web Address 14.5 www.e-analytics.com/splitd.htm What’s On the Web? www.fool.com www.companyboardroom.com finance.yahoo.com www.pg.com CHAPTER ORGANIZATION 14.1 Cash Dividends and Dividend Payment Cash Dividends Standard Method of Cash Dividend Payment Dividend Payment: A Chronology 14.1 Key Concepts and Skills 14.2 Chapter Outline 14.3 Cash Dividends 14.4 Dividend Payment 14.5 Figure 14.2 The Ex-Day Price Drop 14.6 Does Dividend Policy Matter? 14.7 Illustration of Irrelevance 14.8 Low Payout Please 14.9 High Payout Please 14.10 Clientele Effect 14.11 Implications of the Clientele Effect 14.12 Information Content of Dividends 14.13 Dividend Policy in Practice 14.14 Residual Dividend Policy 14.15 Example: Residual Dividend Policy 14.16 Compromise Dividend Policy 14.17 Stock Repurchase 14.18 Real-World Considerations 14.19 Information Content of Stock Repurchases 14.20 Stock Repurchase Announcement 14.21 Stock Dividends 14.22 Stock Splits 14.23 Quick Quiz
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A-171 DIVIDENDS AND DIVIDEND POLICY More on the Ex-Dividend Date 14.2 Does Dividend Policy Matter? An Illustration of the Irrelevance of Dividend Policy A Test Some Real-World Factors Favoring a Low Payout Some Real-World Factors Favoring a High Payout Clientele Effects: A Resolution of Real-World Factors? 14.3 Establishing a Dividend Policy Residual Dividend Approach Dividend Stability A Compromise Dividend Policy 14.4 Stock Repurchase: An Alternative to Cash Dividends Cash Dividends versus Repurchase Real-World Considerations in a Repurchase Share Repurchase and EPS 14.5 Stock Dividends and Stock Splits Value of Stock Splits and Stock Dividends Reverse Splits ANNOTATED CHAPTER OUTLINE Slide 14.1 Key Concepts and Skills Slide 14.2 Chapter Outline 14.1. Cash Dividends and Dividend Payment .A Cash Dividends Regular cash dividend – normal dividends, usually paid on a quarterly basis Extra cash dividend – paid over and above the regular dividend, may or may not be repeated Special dividend – one-time dividend paid over and above the regular dividend, won’t be repeated Slide 14.3 Cash Dividends .B Standard Method of Cash Dividend Payment The Board of Directors declares dividends, after which the dividends become liabilities of the firm.
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CHAPTER 14 A-172 .C Dividend Payment: A Chronology Declaration date – the dividend is declared by the Board of Directors and becomes a liability of the firm Ex-dividend date – occurs 2 days prior to the date of record; if you purchase the stock on or after the ex-dividend date, you will not receive the dividend Date of record – firm prepares the list of stockholders who will receive dividends Date of payment – checks are mailed Slide 14.4 Dividend Payment Real-World Tip, page 422: Dividend reinvestment plans (DRIPS) allow investors to reinvest dividend income back into the issuing company without paying commissions. Many plans also allow shareholders to buy additional shares directly from the company, often on a set schedule. This again avoids commissions, although
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