国际财务管理培训教材(英文版).pptx

Slide 1Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinDividends and Other PayoutsSlide 2Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinKey Concepts and SkillsUnderstand dividend types and how they are paidUnderstand the issues surrounding dividend policy decisionsUnderstand why share repurchases are an alternative to dividendsUnderstand the difference between cash and stock dividendsSlide 3Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinChapter Outline18.1 Different Types of Dividends18.2 Standard Method of Cash Dividend Payment18.3 The Benchmark Case:An Illustration of the Irrelevance of Dividend Policy18.4Repurchase of Stock18.5 Personal Taxes and Dividends18.6 Real-World Factors Favoring a High Dividend Policy18.7 The Clientele Effect:A Resolution of Real-World Factors?18.8 What We Know and Do Not Know about Dividend Policy18.9Stock Dividends and Stock SplitsSlide 4Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/Irwin18.1 Different Types of DividendsMany companies pay a regular cash dividend.Public companies often pay quarterly.Sometimes firms will pay an extra cash dividend.The extreme case would be a liquidating dividend.Companies will often declare stock dividends.No cash leaves the firm.The firm increases the number of shares outstanding.Some companies declare a dividend in kind.Wrigleys Gum sends a box of chewing gum.Dundee Crematoria offers shareholders discounted cremations.Slide 5Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/Irwin18.2 Standard Method of Cash DividendRecord Date Date on which company determines existing shareholders.Ex-Dividend Date-Date that determines whether a stockholder is entitled to a dividend payment;anyone holding stock immediately before this date is entitled to a dividend.Cash Dividend-Payment of cash by the firm to its shareholders.Slide 6Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinProcedure for Cash Dividend25 Oct.1 Nov.2 Nov.5 Nov.7 Dec.Declaration DateCum-dividend DateEx-dividend DateRecord DatePayment DateDeclaration Date:The Board of Directors declares a payment of dividends.Cum-Dividend Date:Buyer of stock still receives the dividend.Ex-Dividend Date:Seller of the stock retains the dividend.Record Date:The corporation prepares a list of all individuals believed to be stockholders as of 5 November.Slide 7Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinPrice BehaviorIn a perfect world,the stock price will fall by the amount of the dividend on the ex-dividend date.$P$P-divEx-dividend DateThe price drops by the amount of the cash dividend.-t -2-10+1+2 Taxes complicate things a bit.Empirically,the price drop is less than the dividend and occurs within the first few minutes of the ex-date.Slide 8Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/Irwin18.3 The Irrelevance of Dividend PolicyA compelling case can be made that dividend policy is irrelevant.Since investors do not need dividends to convert shares to cash;they will not pay higher prices for firms with higher dividends.In other words,dividend policy will have no impact on the value of the firm because investors can create whatever income stream they prefer by using homemade dividends.Slide 9Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinHomemade DividendsBianchi Inc.is a$42 stock about to pay a$2 cash dividend.Bob Investor owns 80 shares and prefers a$3 dividend.Bobs homemade dividend strategy:Sell 2 shares ex-dividend homemade dividendsCash from dividend$160Cash from selling stock$80Total Cash$240Value of Stock Holdings$40 78=$3,120$3 Dividend$240$0$240$39 80=$3,120Slide 10Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinDividend Policy is IrrelevantIn the above example,Bob Investor began with a total wealth of$3,360:After a$3 dividend,his total wealth is still$3,360:After a$2 dividend and sale of 2 ex-dividend shares,his total wealth is still$3,360:Slide 11Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinDividends and Investment PolicyFirms should never forgo positive NPV projects to increase a dividend(or to pay a dividend for the first time).Recall that one of the assumptions underlying the dividend-irrelevance argument is:“The investment policy of the firm is set ahead of time and is not altered by changes in dividend policy.”Slide 12Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/Irwin18.4 Repurchase of StockInstead of declaring cash dividends,firms can rid themselves of excess cash through buying shares of their own stock.Recently,share repurchase has become an important way of distributing earnings to shareholders.Slide 13Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinStock Repurchase versus Dividend$10=/100,000$1,000,000=Price per share100,000=outstanding Shares1,000,000Value of Firm1,000,000Value of Firm1,000,000Equity850,000 AssetsOther 0Debt$150,000Cashsheet balance Original A.Equity&Liabilities AssetsConsider a firm that wishes to distribute$100,000 to its shareholders.Slide 14Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinStock Repurchase versus Dividend$9=00,000$900,000/1=shareper Price100,000=goutstandin Shares900,000Firm of Value900,000Firm of Value900,000Equity850,000AssetsOther 0Debt$50,000Cashdividendcash shareper$1After B.Equity&sLiabilitie AssetsIf they distribute the$100,000 as a cash dividend,the balance sheet will look like this:Slide 15Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinStock Repurchase versus DividendAssets Liabilities&EquityC.After stock repurchaseCash$50,000Debt0Other Assets850,000Equity900,000Value of Firm 900,000Value of Firm 900,000Shares outstanding=90,000Price per share=$900,000/90,000=$10If they distribute the$100,000 through a stock repurchase,the balance sheet will look like this:Slide 16Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinShare RepurchaseFlexibility for shareholdersKeeps stock price higher Good for insiders who hold stock optionsAs an investment of the firm(undervaluation)Tax benefits Slide 17Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/Irwin 18.5 Personal Taxes and DividendsTo get the result that dividend policy is irrelevant,we needed three assumptions:No taxesNo transactions costsNo uncertaintyIn the United States,both cash dividends and capital gains are taxed at a maximum rate of 15 percent.Since capital gains can be deferred,the tax rate on dividends is greater than the effective rate on capital gains.Slide 18Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinFirms without Sufficient Cash In a world of personal taxes,firms should not issue stock to pay a dividend.FirmStock Holders Cash:stock issueCash:dividendsGov.TaxesInvestment BankersThe direct costs of stock issuance will add to this effect.Slide 19Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinFirms with Sufficient CashThe above argument does not necessarily apply to firms with excess cash.Consider a firm that has$1 million in cash after selecting all available positive NPV projects.Select additional capital budgeting projects(by assumption,these are negative NPV).Acquire other companiesPurchase financial assetsRepurchase sharesSlide 20Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinTaxes and DividendsIn the presence of personal taxes:1.A firm should not issue stock to pay a dividend.2.Managers have an incentive to seek alternative uses for funds to reduce dividends.3.Though personal taxes mitigate against the payment of dividends,these taxes are not sufficient to lead firms to eliminate all dividends.Slide 21Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/Irwin18.6 Real-World Factors Favoring High DividendsDesire for Current IncomeBehavioral FinanceIt forces investors to be disciplined.Tax ArbitrageInvestors can create positions in high dividend yield securities that avoid tax liabilities.Agency CostsHigh dividends reduce free cash flow.Slide 22Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/Irwin18.7 The Clientele EffectClienteles for various dividend payout policies are likely to form in the following way:GroupStock TypeHigh Tax Bracket IndividualsLow Tax Bracket IndividualsTax-Free InstitutionsCorporations Zero-to-Low payoutLow-to-Medium payoutMedium payoutHigh payoutOnce the clienteles have been satisfied,a corporation is unlikely to create value by changing its dividend policy.Slide 23Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/Irwin18.8 What We Know and Do Not KnowCorporations“smooth”dividends.Fewer companies are paying dividends.Dividends provide information to the market.Firms should follow a sensible policy:Do not forgo positive NPV projects just to pay a dividend.Avoid issuing stock to pay dividends.Consider share repurchase when there are few better uses for the cash.Slide 24Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/Irwin18.9 Stock DividendsPay additional shares of stock instead of cashIncreases the number of outstanding sharesSmall stock dividendLess than 20 to 25%If you own 100 shares and the company declared a 10%stock dividend,you would receive an additional 10 shares.Large stock dividend more than 20 to 25%Slide 25Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinStock SplitsStock splits essentially the same as a stock dividend except it is expressed as a ratioFor example,a 2 for 1 stock split is the same as a 100%stock dividend.Stock price is reduced when the stock splits.Common explanation for split is to return price to a“more desirable trading range.”Slide 26Copyright 2008 by The McGraw-Hill Companies,Inc.All rights reserved McGraw-Hill/IrwinQuick QuizWhat are the different types of dividends,and how is a dividend paid?What is the clientele effect,and how does it affect dividend policy irrelevance?What is the information content of dividend changes?What are stock dividends,and how do they differ from cash dividends?How are share repurchases an alternative to dividends,and why might investors prefer them?