Management and Organizational Studies 2310A/B Chapter 17: Chapter 17
22 Nov 2017
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17. 1 distribution to shareholders: payout policy: the way a firm chooses between the alternative ways to pay cash out to shareholders. Special dividend: a one time dividend payment a firm makes that is usually much larger than a regular dividend. The firm then pays the lowest price at which it can buy back desired number of shares. Targeted repurchase: the repurchasing of shares by a firm directly from a specific shareholder; purchase price negotiated directly with the seller. May be at discount: greenmail: a firms avoidance of theat of takeover and removal of its management by a major shareholder by buying out the shareholder. 17. 2 dividend versus share repurchases in a perfect capital market: eg. Genron has 20million in access cash and no debt. Alternative policy 1: pay a dividend with excess cash: eg. Alternative policy 2: share repurchase (no dividend: uses the million to repurchase shares instead.
