财务管理ppt英文课件Cha(5)
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16
Payment date
Days
a
5
Price Behavior around the Ex-Dividend Date
• In a perfect world, the stock price will fall by the amount of the dividend on the ex-dividend date.
• Dividends are paid only if profits are not completely used for investment purposes. • Desired debt-to-equity ratio is maintained.
a
11
Dividends Increase Value
-t … -2 -1 0 $P
+1 +2 …
$P - div
The price drops by the amount of
Exdividend
the cash
Date
dividend
Taxes complicate things a bit. Empirically, the price drop is less than the dividend and occurs within the first
• Residual Dividend Policy • Stable Dividend Payments • Stable Dividend-payout Ratios • Lower Regular Dividend Plus Extra Dividends
a
15
Residual Dividend Policy
cuts send bad news.
• Because a high dividend payout policy will be costly to firms that do not have the cash flow to support it, dividend increases signal a company’s good fortune and its manager’s confidence in future cash flows.
a
2
Dividend Payments
Cash Dividend - Payment of cash by the firm to its shareholders.
Stock Dividend - Distribution of additional shares to a firm’s stockholders.
• Record date: declared dividends are distributable to
shareholders of record on a specific date.
• Payment date: the dividend cheques are mailed to shareholders
Stock Splits - Issue of additional shares to firm’s stockholders.
Stock Repurchase - Firm buys back stock from its shareholders.
a
3
Procedure for Dividend Payment
• Assumptions: – Perfect competition, no taxes, no transaction costs – Homogenous expectations – The investment policy of the firm does not depend on its dividend policy (‘always invest if NPV>0’)
$1000 -240 $760
P0 = $1200/1.2 + $760/1.22 = $1 527.78
a
9
MM: Irrelevance of Dividend Policy
• Under perfect markets and in the absence of arbitrage opportunities, the value of a firm is independent of the dividend policy
a
8
Does Dividend Policy Matter?
Assume an additional $200 of dividends is offered, financed by an issue of debt or shares. New dividend plan:
0
1
2
$1000 +200 $1200
• Investors can create whatever income stream they prefer by using homemade dividends.
a
10
Residual Dividend Policy
• Issue costs eliminate any indifference between financing by internal capital and new shares.
Dividends
999
666
333
0
-333 0
500 1000 1500 2000 2500 3000 New investment
a
17
Dividend Stability
Dividends begin at 50% of earnings, but are stable and increase only when supported by growth in earnings.
of record.
a
4
Procedure for Dividend Payment
Thursday, January
15
Declaration date
Wednesday, January 28
Ex-dividend date
Friday, January
30
Record date
Monday, February
• These clients increase the price of the stock through their demand for a dividend paying stock.
a
12
Dividends Increase Value
Dividends as Signals • Dividend increases send good news about cash flows and earnings. Dividend
a
13
Dividends Decrease Value
Tax Consequences • Companies can convert dividends into capital gains by shifting their dividend policies.
If dividends are taxed more heavily than capital gains, taxpaying investors should welcome such a move and value the firm more favorably.
a
7
Does Dividend Policy Matter?
Dividend policy versus cash dividends
n An illustration of dividend irrelevance u Original dividends
0
1
2
$1000 $1000
If RE = 20%: P0 = $1000/1.2 + $1000/1.22 = $1 527.78
Market Imperfectionswk.baidu.comand Clientele Effect • There are natural clients for high-payout stocks, but it does not follow that any
particular firm can benefit by increasing its dividends. The high dividend clientele already have plenty of high dividend stock to choose from.
• Declaration date: the board of directors declares a payment of
dividends.
• Ex-dividend date: a share does ex-dividend on the date the
seller is entitled to keep the dividend. Under ASX rules, shares are traded ex-dividend on and after the seventh business day before the record date.
Dollars Per Share
4
50% dividend-payout
rate with stability
3
2 1
Earnings per share Dividends per share
Time
a
18
Dividend Stability
Stability -- maintaining the position of the firm’s dividend payments in relation to a trend line.
few minutes of the ex-date.
a
6
Arguments For Dividend Policy
Can the payment of cash dividends affect shareholder wealth?
Dividend relevance Dividend Irrelevance
• In such a tax environment, the total cash flow retained by the firm and/or held by shareholders will be higher than if dividends are paid.
a
14
Dividend Policy
Chapter 18
Dividend Policy
Chapter Objectives
• Discuss the different forms of dividends and the appropriate dividend payment terminology.
• Outline the arguments supporting the case for dividend irrelevance. • Discuss factors favoring a low or a high payout. • Explain the residual dividend policy. • Illustrate the situation of share repurchases vs paying a cash dividend. • Discuss both share splits and reverse Stock Splits.
Row
(1 )
(2 )
(3 )
(4 )
(5 )
(6 )
A fter-tax
N ew
A d d itio n a l R e ta in e d A d d itio n a l
e a rn in g s in v e stm e n t
debt
e a rn in g s sh a re s D iv id e n d s
1
1 000
3 000
1 000
1 000
1 000
0
2
1 000
2 000
667
1 000
333
0
3
1 000
1 500
500
1 000
0
0
4
1 000
1 000
333
667
0
333
5
1 000
500
167
333
0
667
6
1 000
0
0
0
0
1 000
a
16
Relationship Between Dividends and Investment
Payment date
Days
a
5
Price Behavior around the Ex-Dividend Date
• In a perfect world, the stock price will fall by the amount of the dividend on the ex-dividend date.
• Dividends are paid only if profits are not completely used for investment purposes. • Desired debt-to-equity ratio is maintained.
a
11
Dividends Increase Value
-t … -2 -1 0 $P
+1 +2 …
$P - div
The price drops by the amount of
Exdividend
the cash
Date
dividend
Taxes complicate things a bit. Empirically, the price drop is less than the dividend and occurs within the first
• Residual Dividend Policy • Stable Dividend Payments • Stable Dividend-payout Ratios • Lower Regular Dividend Plus Extra Dividends
a
15
Residual Dividend Policy
cuts send bad news.
• Because a high dividend payout policy will be costly to firms that do not have the cash flow to support it, dividend increases signal a company’s good fortune and its manager’s confidence in future cash flows.
a
2
Dividend Payments
Cash Dividend - Payment of cash by the firm to its shareholders.
Stock Dividend - Distribution of additional shares to a firm’s stockholders.
• Record date: declared dividends are distributable to
shareholders of record on a specific date.
• Payment date: the dividend cheques are mailed to shareholders
Stock Splits - Issue of additional shares to firm’s stockholders.
Stock Repurchase - Firm buys back stock from its shareholders.
a
3
Procedure for Dividend Payment
• Assumptions: – Perfect competition, no taxes, no transaction costs – Homogenous expectations – The investment policy of the firm does not depend on its dividend policy (‘always invest if NPV>0’)
$1000 -240 $760
P0 = $1200/1.2 + $760/1.22 = $1 527.78
a
9
MM: Irrelevance of Dividend Policy
• Under perfect markets and in the absence of arbitrage opportunities, the value of a firm is independent of the dividend policy
a
8
Does Dividend Policy Matter?
Assume an additional $200 of dividends is offered, financed by an issue of debt or shares. New dividend plan:
0
1
2
$1000 +200 $1200
• Investors can create whatever income stream they prefer by using homemade dividends.
a
10
Residual Dividend Policy
• Issue costs eliminate any indifference between financing by internal capital and new shares.
Dividends
999
666
333
0
-333 0
500 1000 1500 2000 2500 3000 New investment
a
17
Dividend Stability
Dividends begin at 50% of earnings, but are stable and increase only when supported by growth in earnings.
of record.
a
4
Procedure for Dividend Payment
Thursday, January
15
Declaration date
Wednesday, January 28
Ex-dividend date
Friday, January
30
Record date
Monday, February
• These clients increase the price of the stock through their demand for a dividend paying stock.
a
12
Dividends Increase Value
Dividends as Signals • Dividend increases send good news about cash flows and earnings. Dividend
a
13
Dividends Decrease Value
Tax Consequences • Companies can convert dividends into capital gains by shifting their dividend policies.
If dividends are taxed more heavily than capital gains, taxpaying investors should welcome such a move and value the firm more favorably.
a
7
Does Dividend Policy Matter?
Dividend policy versus cash dividends
n An illustration of dividend irrelevance u Original dividends
0
1
2
$1000 $1000
If RE = 20%: P0 = $1000/1.2 + $1000/1.22 = $1 527.78
Market Imperfectionswk.baidu.comand Clientele Effect • There are natural clients for high-payout stocks, but it does not follow that any
particular firm can benefit by increasing its dividends. The high dividend clientele already have plenty of high dividend stock to choose from.
• Declaration date: the board of directors declares a payment of
dividends.
• Ex-dividend date: a share does ex-dividend on the date the
seller is entitled to keep the dividend. Under ASX rules, shares are traded ex-dividend on and after the seventh business day before the record date.
Dollars Per Share
4
50% dividend-payout
rate with stability
3
2 1
Earnings per share Dividends per share
Time
a
18
Dividend Stability
Stability -- maintaining the position of the firm’s dividend payments in relation to a trend line.
few minutes of the ex-date.
a
6
Arguments For Dividend Policy
Can the payment of cash dividends affect shareholder wealth?
Dividend relevance Dividend Irrelevance
• In such a tax environment, the total cash flow retained by the firm and/or held by shareholders will be higher than if dividends are paid.
a
14
Dividend Policy
Chapter 18
Dividend Policy
Chapter Objectives
• Discuss the different forms of dividends and the appropriate dividend payment terminology.
• Outline the arguments supporting the case for dividend irrelevance. • Discuss factors favoring a low or a high payout. • Explain the residual dividend policy. • Illustrate the situation of share repurchases vs paying a cash dividend. • Discuss both share splits and reverse Stock Splits.
Row
(1 )
(2 )
(3 )
(4 )
(5 )
(6 )
A fter-tax
N ew
A d d itio n a l R e ta in e d A d d itio n a l
e a rn in g s in v e stm e n t
debt
e a rn in g s sh a re s D iv id e n d s
1
1 000
3 000
1 000
1 000
1 000
0
2
1 000
2 000
667
1 000
333
0
3
1 000
1 500
500
1 000
0
0
4
1 000
1 000
333
667
0
333
5
1 000
500
167
333
0
667
6
1 000
0
0
0
0
1 000
a
16
Relationship Between Dividends and Investment