Stock Market and Payout

 Stock Market and Payout Article

Week 11 (11/26): Gainesboro Mechine Application (27)

In mid-September 2006, Ashley Swenson, the chief financial officer (CFO) of a large computer-aided design and computer-aided manufacturing (CAD/CAM) tools manufacturer needed to decide whether to pay out payouts to the firm's shareholders, or repurchase stock. If Swenson chose to spend dividends, she'd have to also decide upon the magnitude in the payout. An auxilliary brand question is actually the firm should embark on a advertising campaign of corporate-image advertising, and change its corporate name to reflect the new outlook.

Suggested Questions

1 . In theory, to finance an increased dividend payout or possibly a stock buyback, a firm may well invest significantly less, borrow more, or concern more inventory. Which of people three elements is Gainesboro's management willing to vary, and which elements remain set as a couple of the company's plan? 2 . What happens to Gainesboro's loans need and unused debt capacity if: a. not any dividends will be paid?

如果不把錢拿去付股利的話,那些錢可以拿去做投資,如CAD/CAM等需要大量的資金投資的先進技術,但由於不發放股利,這樣會影響投資人投資公司的意願,進而影響公司未來籌資及財務表現等等。 如果沒有付股利的話,會讓投資人覺得你是否focus在比較hi-tech的未來目標,跟同業比起來這種類型的公司比較少再發放股利,所以這樣子他們會比較有更多的capital,所以他們growth的機會比較高,會讓有些投機客擔心會不會很久之後才會有dividends

n. a twenty percent payout is usually pursued?

雖然採取這樣折衷的方法對兩邊都比較沒有負擔,但跟同業比起來,20%的股利較低,如此一來,相較於同業,可以更彈性運用手上現金,做更理想的投資,研發新科技。但會讓投資人覺得比較擔心,是否公司的狀況較差,才會比起同業而言,發放的股利較低。 c. a 40% payout is pursued?

公司內部對公司的未來比較有自信,但是40%有點高,會稀釋掉手頭上的現金,對未來的投資會比較受限制;且對於40%股利來說,可能無法支撐預期未來會有15%的成長目標。 d. a residual payout coverage is pursued?

因為高科技技術需要將資金投入於研發中,其必須確保擁有足夠的現金,因此這種類型的公司通常比較不會發放很高的股利。公司先把錢拿去做投資,剩下的錢再拿去發股利,這樣對公司的投資方面比較不會有太大的負擔;

Be aware that case Display 8 gives an estimate of the amount of borrowing required. Assume that maximum debt capability is, being a matter of coverage, 40% with the book value of collateral. 3. So how does15404 Gainesboro's several providers of capital, including its stockholders and lenders, react in the event Gainesboro declares a gross in 2006? What are the arguments pertaining to and up against the zero payout, 40%...

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