In mid-September 2001, Jennifer Campbell, chief financial officer of this large CAD / CAM (computer-aided design and manufacturing) equipment manufacturer must decide whether to pay dividends to shareholders of the company or repurchase shares. If Campbell wants to pay a dividend, it must also decide on the payments. Subsidiary question is whether the firm should embark on a campaign of corporate image advertising and change its corporate name to reflect its new outlook. Serves as a consolidated review of many of the practical aspects of dividends and share repurchases solutions, including (1) signaling effects, (2) the effects of customers, and (3) finance and investment implications of increasing dividends and share repurchase decisions. Can follow the treatment of dividend irrelevance Modigliani Miller theorem, and serve to highlight the practical considerations in determining the dividend policy.
This Darden study. "Hide
by Robert F. Bruner, Casey Opitz C. Source: Darden School of Business 16 pages. Publication Date: March 22, 2002. Prod. #: UV0013-PDF-ENG
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