Rockboro Machine Tools Corporation Case Solution
This is just an excerpt. This case is about FINANCE & ACCOUNTING
PUBLICATION DATE: December 14, 2016
In mid-September 2015, Sara Larson, the primary financial officer of this big CAD/CAM (computer-aided design and production) devices producer need to choose whether to pay returns to the company's investors, or bought stock. She should likewise choose on the magnitude of the payment if Larson picks to pay out dividends. A subsidiary concern is whether the company needs to start a project of corporate-image marketing and alter its business name to show its brand-new outlook.
The case functions as an omnibus evaluation of the many useful elements of the dividend and share buyback choices, consisting of (1) signaling impacts, (2) clients impacts, and (3) financing and financial investment ramifications of enhancing dividend payment and share redeemed choices. This situation can adhere to a treatment of the Miller-Modigliani dividend-irrelevance theorem and serves to highlight useful factors to consider in setting dividend policy.
