MGMT310_lecture12

MGMT310_lecture12 - Review ReviewQuestions 1 Firm X has an...

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eview Questions Review Questions 1. Firm X has an investment opportunity that costs $100 million today, but is certain to have a HUGE payoff for the firm in the future. Investor A ,along term investor, definitely wants the rm ake e vestment n e ther and vestor firm to make the investment. On the other hand, Investor B is retiring and wants to sell her shares soon. She is adamantly opposed to this investment since she will not be around to reap the benefits. Which investor’s desires should the firm follow? What should the CEO doorsay?
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t’s talk about dividends Let s talk about dividends Payment is at the discretion of the board. After the dividend has been declared, it becomes debt and can't be rescinded easily. Taxes i idends cannot be declared as abs i n e s sepen se (paidot of after profits) Dividends cannot be declared as a business expense (paid out of after tax profits) Individuals must pay tax on dividends they receive. When a company receives dividends paid by another corporation, they are partially tax exempt to the recipient. Types Regular cash dividends: Most common type, usually paid quarterly Extra, Special, Liquidating Stock dividends: Similar to stock splits Timing Declaration date, Ex dividend date, date of record, date of payment
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dividuals’ dividend taxation in US (2003+) Individuals dividend taxation in US (2003 )
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MGMT310_lecture12 - Review ReviewQuestions 1 Firm X has an...

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