chapter15dividend6-1財(cái)務(wù)管理-資料下載頁(yè)
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【正文】 s avoid setting a high dividend that cannot be maintained. ? Repurchased stock can be used in takeovers or resold to raise cash as needed. ? Stockholders may take as a positive signalmanagement thinks stock is undervalued. 1525 Disadvantages of Repurchases ? May be viewed as a negative signal (firm has poor investment opportunities). ? Selling stockholders may not be well informed, hence be treated unfairly. ? Firm may have to bid up price to plete purchase, thus paying too much for its own stock. 1526 Stock dividends vs. Stock splits ? Stock dividend: Firm issues new shares in lieu of paying a cash dividend. If 10%, get 10 shares for each 100 shares owned. ? Stock split: Firm increases the number of shares outstanding, say 2:1. Sends shareholders more shares. 1527 ? Both stock dividends and stock splits increase the number of shares outstanding, so “the pie is divided into smaller pieces.” ? Unless the stock dividend or split conveys information, or is acpanied by another event like higher dividends, the stock price falls so as to keep each investor’s wealth unchanged. ? But splits/stock dividends may get us to an “optimal price range.” Stock dividends vs. Stock splits 1528 When and why should a firm consider splitting its stock? ? There’s a widespread belief that the optimal price range for stocks is $20 to $80. Stock splits can be used to keep the price in this optimal range. ? Stock splits generally occur when management is confident, so are interpreted as positive signals. ? On average, stocks tend to outperform the market in the year following a split.
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