Mid-September 2005 has Ashley Swenson, the chief financial officer of this large CAD / CAM (Computer Aided Design and Manufacturing) device manufacturers decide whether the payment of dividends to the shareholders of the company or to buy back shares. If Swenson chooses, dividends, they must also decide on the size of the payout. A subsidiary question is whether the company should embark on a campaign of corporate image advertising and change the company name to reflect its new perspectives. Th … Read more »

Mid-September 2005 has Ashley Swenson, the chief financial officer of this large CAD / CAM (Computer Aided Design and Manufacturing) device manufacturers decide whether the payment of dividends to the shareholders of the company or to buy back shares. If Swenson chooses, dividends, they must also decide on the size of the payout. A subsidiary question is whether the company should embark on a campaign of corporate image advertising and change the company name to reflect its new perspectives. The case serves as an omnibus review of the practical aspects of dividend and share repurchase program decisions, including (1) signaling effects, (2) clientele effects, and (3) finance and investment implications of increasing dividend and share repurchase program decisions. This case can follow to select a treatment of the Miller-Modigliani dividend irrelevance theorem and is used for practical considerations in determining dividend policy.
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from
Robert F. Bruner,
Sean Carr
Source: Darden School of Business
16 pages.
Release Date: 6 December 2005. Prod #: UV1383-PDF-ENG
Gainesboro Machine Tool Company HBR case solution

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