Capital Structure, Dividend Policy and Valuation
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“Dividend Policy and Share Price Volatility”
“Dividend policy and share price volatility” Sew Eng Hooi AUTHORS Mohamed Albaity Ahmad Ibn Ibrahimy Sew Eng Hooi, Mohamed Albaity and Ahmad Ibn Ibrahimy (2015). Dividend ARTICLE INFO policy and share price volatility. Investment Management and Financial Innovations, 12(1-1), 226-234 RELEASED ON Tuesday, 07 April 2015 JOURNAL "Investment Management and Financial Innovations" FOUNDER LLC “Consulting Publishing Company “Business Perspectives” NUMBER OF REFERENCES NUMBER OF FIGURES NUMBER OF TABLES 0 0 0 © The author(s) 2021. This publication is an open access article. businessperspectives.org Investment Management and Financial Innovations, Volume 12, Issue 1, 2015 Sew Eng Hooi (Malaysia), Mohamed Albaity (Malaysia), Ahmad Ibn Ibrahimy (Malaysia) Dividend policy and share price volatility Abstract The objective of this study is to examine the relationship between dividend policy and share price volatility in the Malaysian market. A sample of 319 companies from Kuala Lumpur stock exchange were studied to find the relationship between stock price volatility and dividend policy instruments. Dividend yield and dividend payout were found to be negatively related to share price volatility and were statistically significant. Firm size and share price were negatively related. Positive and statistically significant relationships between earning volatility and long term debt to price volatility were identified as hypothesized. However, there was no significant relationship found between growth in assets and price volatility in the Malaysian market. Keywords: dividend policy, share price volatility, dividend yield, dividend payout. JEL Classification: G10, G12, G14. Introduction (Wang and Chang, 2011). However, difference in tax structures (Ho, 2003; Ince and Owers, 2012), growth Dividend policy is always one of the main factors and development (Bulan et al., 2007; Elsady et al., that an investor will focus on when determining 2012), governmental policies (Belke and Polleit, 2006) their investment strategy. -
Preparing a Venture Capital Term Sheet
Preparing a Venture Capital Term Sheet Prepared By: DB1/ 78451891.1 © Morgan, Lewis & Bockius LLP TABLE OF CONTENTS Page I. Purpose of the Term Sheet................................................................................................. 3 II. Ensuring that the Term Sheet is Non-Binding................................................................... 3 III. Terms that Impact Economics ........................................................................................... 4 A. Type of Securities .................................................................................................. 4 B. Warrants................................................................................................................. 5 C. Amount of Investment and Capitalization ............................................................. 5 D. Price Per Share....................................................................................................... 5 E. Dividends ............................................................................................................... 6 F. Rights Upon Liquidation........................................................................................ 7 G. Redemption or Repurchase Rights......................................................................... 8 H. Reimbursement of Investor Expenses.................................................................... 8 I. Vesting of Founder Shares..................................................................................... 8 J. Employee -
Dividend Policy in the Absence of Taxes
Dividend Policy in the Absence of Taxes Khamis Al-Yahyaee, Toan Pham*, and Terry Walter School of Banking and Finance, University of New South Wales Abstract We examine dividend policy in Oman, this being a unique environment where firms distribute almost 100% of their profits as dividends, and where firms are highly levered through bank loans, thus reducing the role of dividends in agency cost mitigation. We find that profitability, size and business risk are factors that determine dividend policy of both financial and non- financial firms. Government ownership, leverage and age have a significant impact on the dividend policy of non-financial firms but no effect on financial firms. The factors that influence the probability of paying dividends are the same factors that determine the amount of dividends paid for both financial and non-financial firms. Our results also show that agency costs mitigation is not a critical driver of dividend policy of Omani firms. Finally, we apply the Lintner (1956) model and find that non-financial firms adopt policies that smooth dividends, whereas financial firms do not have stable dividend policies. JEL Classification: G35 Keywords: dividends, taxes, agency theory December 2006 * Corresponding author. E-mail address: [email protected]. School of Banking and Finance, University of New South Wales, Sydney, 2052 Australia. Phone: +61 2 9385 5869 Fax: +61 2 9385 6347 1. Introduction “Although a number of theories have been put forward in the literature to explain their pervasive presence, dividends remain one of the thorniest puzzles in corporate finance” (Allen, Bernardo, and Welch (2000, p.2499)) The question of “Why do corporations pay dividends?” has puzzled researchers for many years. -
Dividend Reinvestment Plan Prospectus
Prospectus Supplement (To Prospectus dated August 3, 2012) Common Stock ($1.00 Par Value) Dividend Reinvestment Plan This Prospectus Supplement (this “Prospectus Supplement”) relates to 1,400,000 shares of Common Stock, par value $1.00 per share (“Shares”), of Pitney Bowes Inc. (“Pitney Bowes” or the “Company”) registered for sale under the Company’s Dividend Reinvestment Plan (“Plan”). The description of the Plan contained in this Prospectus Supplement supplements, and to the extent it is inconsistent with, supersedes the description of the Plan in the accompanying prospectus. It is suggested that this Prospectus Supplement be retained for future reference. This Prospectus Supplement does not constitute an offer to sell or a solicitation of an offer to buy the securities covered by this Prospectus Supplement in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. We are not making an offer to sell or a solicitation of an offer to buy these securities in any circumstances in which such offer or solicitation is unlawful. You should rely only on the information incorporated by reference or provided in this Prospectus Supplement or any further prospectus supplement. We have not authorized anyone else to provide you with different information or to make additional representations. You should not assume that the information contained or incorporated by reference in this Prospectus Supplement or any further prospectus supplement is accurate as of any date other than the date on the front of those documents. Our Common Stock is listed on the New York Stock Exchange under the ticker symbol “PBI.” Investing in our Common Stock involves risks. -
Oceanfirst Financial Corp
Broadridge DRP A Stock Purchase, Sale and Dividend Reinvestment Plan Administered by Broadridge Corporate Issuer Solutions, Inc . Ready for Next Broadridge Corporate Issuer Solutions, Inc. (“Broadridge”) is Questions and Answers pleased to administer and provide access to a Stock Purchase, Sale and How do I enroll in the Broadridge DRP? Dividend Reinvestment Plan (the “Plan”, or “DRP”), which offers a means by which existing registered shareholders who hold qualified, freely An existing investor can enroll in the Broadridge DRP online through our website tradable shares of the participating company, can purchase shares through simply by creating a profile and logging into its account. automatic dividend reinvestment as well as submit requests to buy or sell If preferred, you can enroll by completing and submitting an Enrollment Form shares through a registered broker-dealer, without opening a brokerage which can be obtained from our website or by contacting Broadridge and account. As administrator of the Plan, Broadridge is acting on behalf of the requesting a form to be mailed ( please refer to our “Contact Information” section Issuer. Broadridge is not acting as a broker-dealer and will not execute any below). purchase or sale on behalf of such persons. Rather, Broadridge will forward requests to purchase or sell such shares to a broker-dealer appointed by Minimum and maximum investment amounts, as well as any applicable fees, Broadridge, including possibly a broker-dealer affiliated with Broadridge, can be found in these Questions and Answers, Additional Terms and who will execute the transaction. Conditions and Fee Schedule. Broadridge will purchase (through a registered broker-dealer engaged by Broadridge (which may be an affiliate of Broadridge)) Prior to enrolling in the Plan, you should review and understand the whole shares and allocate fractional shares of a participating company’s stock Overview, Questions and Answers, Additional Terms and Conditions, and to equal the dollar amount of your investment, less any applicable fees. -
Corporate Finance Lecture Note Packet 2 Capital Structure, Dividend Policy and Valuation
Aswath Damodaran 1 CORPORATE FINANCE LECTURE NOTE PACKET 2 CAPITAL STRUCTURE, DIVIDEND POLICY AND VALUATION Aswath Damodaran Spring 2016 Aswath Damodaran 2 CAPITAL STRUCTURE: THE CHOICES AND THE TRADE OFF “Neither a borrower nor a lender be” Someone who obviously hated this part of corporate finance First principles 3 Aswath Damodaran 3 The Choices in Financing 4 ¨ There are only two ways in which a business can raise money. ¤ The first is debt. The essence of debt is that you promise to make fixed payments in the future (interest payments and repaying principal). If you fail to make those payments, you lose control of your business. ¤ The other is equity. With equity, you do get whatever cash flows are left over after you have made debt payments. Aswath Damodaran 4 Global Patterns in Financing… 5 Aswath Damodaran 5 And a much greater dependence on bank loans outside the US… 6 Aswath Damodaran 6 Assessing the existing financing choices: Disney, Vale, Tata Motors, Baidu & Bookscape 7 Aswath Damodaran 7 8 The Transitional Phases.. 9 ¨ The transitions that we see at firms – from fully owned private businesses to venture capital, from private to public and subsequent seasoned offerings are all motivated primarily by the need for capital. ¨ In each transition, though, there are costs incurred by the existing owners: ¤ When venture capitalists enter the firm, they will demand their fair share and more of the ownership of the firm to provide equity. ¤ When a firm decides to go public, it has to trade off the greater access to capital markets against the increased disclosure requirements (that emanate from being publicly lists), loss of control and the transactions costs of going public. -
Dividend Investing and a Look Inside the S&P Dow Jones
DIVIDEND INVESTING AND A LOOK INSIDE THE S&P DOW JONES DIVIDEND INDICES SEPTEMBER 2013 1: INTRODUCTION CONTRIBUTORS Aye M. Soe, CFA Dividends have interested investors and theorists since the origins of modern financial theory. Voluminous research has been written on various topics related to dividends Director and dividend-paying firms. Despite inconclusive evidence as to whether dividend- Index Research & Design paying firms are better investment options or whether dividends constitute a more [email protected] important risk factor than size, sector or other fundamental metrics, one fact remains undisputable. Dividend yield is an important component of total return. This is particularly true in light of the financial crisis in 2008, continuing volatility in the equity markets and the current low interest rate environment. Dividend yield-based strategies, which focus on both income and capital appreciation, have proven to produce stable income streams and provide downside protection during market downturns. The first section of this paper establishes the historical importance and benefits of dividends. Dividend-based equity investing has become one of the most discussed investment topics in recent years. Consequently, it is important to distinguish between yield-based strategies versus those that focus on both income and stable growth. In that light, the second section of the paper focuses on the S&P Dow Jones Dividend Indices family, which is divided into three sub-families, to capture all aspects of the benefits of dividends. The rest of the paper provides comparative analysis of the two sub-families in the income and stable growth category. We use risk and return, factor exposure, constituent quality and sector representation metrics in our analysis to compare and differentiate between the two sub-families. -
What Individual Investors Should Know About Holding Securities
What Individual Investors Should Know About Holding Securities Direct Registration System (DRS) DRS lets you avoid the risk of holding a physical certificate that might be lost, stolen or destroyed. Instead, the issuer or its transfer agent registers the securities directly in your name on the books of the company. Additionally, DRS is able to record fractional shares — unlike physical certificates that are only available in whole shares — which is important in the case of stock dividends, splits or merger/acquisition activities that may result in fractional shares being issued to individuals.While not all issuers’ securities are currently available in DRS, Mellon Investor Services (Mellon) acts as the transfer agent for a significant number of leading U.S. companies that are DRS eligible. Shares held in DRS are considered registered shares on the books of the issuer. In its role as the issuer’s transfer agent, Mellon provides a range of shareowner services to investors holding securities through DRS. Mellon sends an account statement when shares are first deposited in DRS, and annually thereafter. Mellon also sends confirmations for all transactions occurring in the account. Dividend checks, annual reports, proxy materials and other shareowner documents and communications are delivered directly to the investor in a timely manner. Through Mellon’s secure Web site at www.melloninvestor.com, investors also can view account information in real time, buy or sell shares or reinvest dividends pursuant to the issuer’s investment plan, if available. You also can opt for electronic delivery of shareowner communications through Mellon’s online program, MLinkSM. Physical Certificate When you hold a physical, paper certificate, your name is registered on the books of the issuing company — just like DRS. -
Rethinking Capital Regulation: the Case for a Dividend Prudential Target by Manuel Muñoz Abstract
Working Paper Series No 97 / June 2019 Rethinking capital regulation: the case for a dividend prudential target by Manuel Muñoz Abstract The paper investigates the e¤ectiveness of dividend-based macroprudential rules in com- plementing capital requirements to promote bank soundness and sustained lending over the cycle. First, some evidence on bank dividends and earnings in the euro area is presented. When shocks hit their pro…ts, banks adjust retained earnings to smooth dividends.This gener- ates bank equity and credit supply volatility. Then, a DSGE model with key …nancial frictions and a banking sector is developed to assess the virtues of what shall be called dividend pru- dential targets. Welfare-maximizing dividend-based macroprudential rules are shown to have important properties: (i) they are e¤ective in smoothing the …nancial and the business cycle by means of less volatile bank retained earnings, (ii) they induce welfare gains associated to a Basel III-type of capital regulation, (iii) they mainly operate through their cyclical component, ensuring that long-run dividend payouts remain una¤ected, (iv) they are ‡exible enough so as to allow bank managers to optimally deviate from the target (conditional on the payment of a sanction), and (v) they are associated to a sanctions regime that acts as an insurance scheme for the real economy. Keywords: macroprudential regulation, capital requirements, dividend prudential target, …nancial stability, bank dividends JEL classi…cation: E44, E61, G21, G28, G35 1 Introduction The recent …nancial crisis has highlighted the importance of counting with a comprehensive pru- dential regulatory framework that includes macroprudential tools to smooth the …nancial cycle and prevent the endogenous build-up of systemic risk (see, e.g., Galati and Moessner 2013, Constâncio 2017). -
Dividend Distribution Policy
Dividend Distribution Policy Principles regarding the Bank’s dividend distribution are set out in detail in the Bank’s Articles of Association. In this respect, shareholders taking into consideration the Bank’s growth targets as well as its financing requirements and the opinion of the Banking Regulation and Supervision Agency are authorised to pass resolutions on whether the dividend distribution shall be in cash or in the form of capital increase, whereupon bonus shares will be issued to shareholders or if part of the distribution shall be in cash and part in the form of capital increase. As per the Articles of Association, the General Assembly may decide to transfer a portion or all of the distributable profit to retained earnings or extraordinary reserves. It is expected to distribute dividend within a month following the General Assembly Meeting at the latest, general assembly decides the date of the dividend distribution. Reference to the articles of association of the Bank, the General Assembly may resolve to pay advances on profit share to shareholders as per the regulations of the Banking Regulation and Supervision Agency and the Capital Market Board and related laws and regulations. In case of interest and dividend payments are cancelled for the debt securities which included in the calculation of equity issued in accordance with the Banking Regulation and Supervision Agency on the Equity of Banks, dividend payments may not be made to the shareholders in relation to the relevant year. It is envisaged that the Dividend Distribution Policy of the Bank will be set out in a way to ensure the realisation of long-term growth plans. -
Shareholder Wealth Effect of Dividend Policy: Empirical Evidence from the Chinese Securities Market
Front. Bus. Res. China 2007, 1(3): 437–455 DOI 10.1007/s11782-007-0026-8 RESEARCH ARTICLE YI Yanxin, KE Dagang, ZHANG Xiao Shareholder wealth effect of dividend policy: Empirical evidence from the Chinese securities market © Higher Education Press and Springer-Verlag 2007 Abstract Based on the special separated equity management structure of the listed companies in China and using a sample of the listed companies with distributed dividend in 2003 and 2004, this paper tests the shareholder wealth effects of dividend policy in Chinese separated equity market. Results show that shareholders of non-circulating stock get a high return rate by cash dividends, and circulating shareholders obtain a high short-term return rate by stock dividends. Keywords dividend policy, shareholder wealth effect, blockholders 摘要 基于我国上市公司股权分置的特殊治理结构,以2003–2004年所有分配股 利的上市公司为样本,实证检验我国上市公司股利政策的股东财富效应,发 现:分配现金股利使非流通股股东实现高回报率,而流通股股东获得股票股利的 较高短期收益率。 关键词 股利政策,股东财富效应,控股股东 Translated from Nankai Guanli Pinglun 南开管理评论 (Nankai Business Review), 2006, 9(2): 4–10 YI Yanxin ( ) The School of Management, Xi’an Jiaotong University, Xi’an 710049, China E-mail: [email protected] KE Dagang The School of Management, Xi’an Jiaotong University, Xi’an 710049, China E-mail: [email protected] ZHANG Xiao The School of Management, Xi’an Jiaotong University, Xi’an 710049, China E-mail: [email protected] 438 YI Yanxin, KE Dagang, ZHANG Xiao 1 Introduction The extant domestic literature on dividend policy of listed companies mainly focuses on three perspectives: the signaling theory, agency cost theory and influencing factors. However, there are few studies on shareholder wealth effects derived from the high return associated with dividend issued by the listed companies. -
Demand Dividend: Creating Reliable Returns in Impact Investing
Demand Dividend: Creating Reliable Returns in Impact Investing June, 2013 Demand Dividend is a debt vehicle designed to improve the repayment cycle for impact investors and ease capital access for social enterprises. Demand Dividend grew out of the need to find alternatives to debt, convertible debt, and equity as funding mechanisms for social enterprises. Demand Dividend has four key features: Key Characteristic Demand Equity Debt Revenue Dividend Royalty A structure designed to enable successful capital exit (a “round X X X trip”) Payments linked to the enterprise’s ability to pay X A return profile commensurate with investor risk in frontier X X X enterprises Incentives to align investor and entrepreneur interests X Demand Dividend is designed to enable investors to generate a reliable, reasonable return while allowing social entrepreneurs to maintain control and efficiently deploy capital. Impact Investing Issues Impact investors targeting small, growing businesses (SGBs) face a variety of issues. In our view, the most relevant are: Underperformance on the return promise. • Exits from equity or convertible debt deals have been rare, • Reliance on the venture capital approach of generating a few “big wins” has not materialized, and • Investable enterprises have been “screened out” due to high portfolio return hurdles. Misalignment of investor and SE incentives. • Exit preferences may be in conflict: the investor prefers a buyout or IPO while the SE desires family or community control, and • Views may diverge on the importance of reliable financials and meeting projections. Scarcity of capital targeting frontier economy SGBs. • Traditional debt or equity instruments are not appropriate; debt does not compensate for risk, and equity lacks a defined liquidity event, and • Relatively fixed due diligence costs are hard to justify for $20,000 to $250,000 investments.