BUS 312 Lecture Notes - Lecture 15: Whole Foods Market, Liquidating Distribution, Treasury Stock

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 312
• Professor: Martin Thorsten

Document Summary

Stock dividend (not the focus of this session) - example: if the firm pays a stock dividend of 5%, it sends each shareholder 5 extra shares for every 100 shares currently owned. (conceptually, a stock dividend is similar to a stock split) Dividends and stock repurchases: stock repurchase: a distribution in the form of the company buying back its stock from shareholders. Repurchased shares become treasury stock (non-voting, non-dividend paying) 1. Buy shares on the market - open market share repurchases represent about 95% of all repurchase transactions. Tender offer to shareholders - firm offers to buy shares at a prespecified price, during short time period (usually within 20 days). Dutch auction - the firm lists different prices at which it is prepared to buy shares, and shareholders in turn indicate how many shares they are willing to sell at each price.