PDF-Unlike a dividend, which returns cash to all stockholders in a firm, a

Privately Negotiated Repurchases In privately negotiated repurchases firms buy back shares from a large stockholder in the company at a negotiated price This method is not as widely used as the fir. Merger. One firm is acquired by another. Acquiring firm retains name and acquired firm ceases to exist. Advantage – legally simple. Disadvantage – must be approved by stockholders of both firms. Consolidation. Financial. Theory. Lecture 6. Review. Goal: M. aximize Value of the Firm. Past Topics. Investment Decision . (spending money). Financing Decision . (raising money). Future Topics. Historical View. Illustrated by the arguments of Gordon (1959) - more dividends = more value. Follows from the discounted dividend approach to valuing a firm:. Historical View. Gordon argued that retained earnings rather than current dividends made the cash flow stream for the shareholder riskier.. M&A Market. Market for Corporate Control. Competition for control of firm assets. Associated with Downsizing. “It’s amazing that the basic cause of downsizing is so rarely acknowledged: . these companies have more workers than they need or can afford to pay. Personal . Taxes. The cash flows to investors are typically taxed twice. Once at the corporate level and then investors are taxed again when they receive their interest or . dividend . payment. . For individuals:. P.V. . Viswanath. Learning Objectives. 2. How is cash returned? The Mechanics. How do we choose between dividends and Share Repurchases?. Why Dividends and Share Repurchases are irrelevant in Perfect Markets. : . Dividends, Retained Earnings, and Income Reporting. 14. Learning Objectives. Explain how to account for . cash dividends. .. Explain how to account for . stock dividends . and splits.. Prepare and analyze a . 22. 21. .1. . Explain what a cash dividend payment is, how dividend payments are made, and why dividend payments are different from interest payments.. 21. .2. . Describe typical dividend payouts and explain the importance of dividends.. Chapter 11. Copyright © 2016 McGraw-Hill Education.  All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.. Wild, Shaw, and . Chiappetta. Financial & Managerial Accounting. Chapter 9. Common and Preferred Stock 9.1. Objectives. How to identify the reasons for investing in common stock. How to identify the reasons for investing in preferred stock. Common and Preferred Stock 9.1. : . Dividends, Retained Earnings, and Income Reporting. 14. Learning Objectives. Explain how to account for . cash dividends. .. Explain how to account for . stock dividends . and splits.. Prepare and analyze a . Chapter 17. Dividend: cash paid out of earnings. Distribution: cash payment from sources other than earnings. Cash . Dividends & Dividend payment. Dividend forms:. Regular cash dividend – cash payments made directly to stockholders, usually each quarter. AN EXPERIENTIAL EXERCISE IN . DETERMINING A FIRM’S PAYOUT POLICY. Professor Robert M. Hull (Corresponding Author). rob.hull@washburn.edu (R. Hull). Professor William Roach. Brenneman Professor Robert A. Weigand. DIVIDEND AND VALUATION. Share of profit distributed to shareholders. Whether to distribute or not. Cash or . stock dividend. How much(% of earnings to be distributed as dividend): D/P Ratio = DPS/EPS .