Share repurchase

Summary We considered the impact of a share repurchase program for a fictional company – Blaine Kitchenware, Inc. It was determined that the liquidation of $209 million in cash and marketable securities and the addition of $50 million in long-term would result in a capital structure which was reasonable and sustainable. Overall, tax expense would be lower, the value of the firm would increase and the riskiness of the company’s equity would edge just a touch higher. From the perspective of both

Share repurchases and the protection of shareholders* KATHLEEN VAN DER LINDE** 1 Introduction From a creditor’s perspective there is not much difference between the payment of a dividend in respect of a share and a payment for the acquisition or repurchase of that share. However, from the point of view of the shareholder a dividend is a return on capital while a repurchase is a return of capital to the vendor shareholder. Share repurchases change the structure of the company’s share capital

Kitchen (CPK), a casual dining pizzeria started in California by co-owners Rick Rosenfield and Larry Flax, was faced with the decision to invest in a stock repurchase program. Led by Chief Financial Officer Susan Collyns, the financial team of CPK was reviewing the preliminary results for the second quarter to determine if the stock repurchase program would provide a significant financial leverage for the company. The goal was to determine if the company can maintain the necessary financial stability

a period of time, it seems that currently it has no such problem. However in future, it may become a cause of concern for the company. Compare the three methods of repurchases: open market repurchase, fixed-price tender offer, and Dutch auction. In the open market share repurchase, the firm may or may not declare the repurchase. Depending on the market condition and the firm’s position in the industry, the firm can decide when and how many

This indicates that the change in EPS may be because of other factors rather than Vodafone’s retained earnings. The factor of this result might be because the share price is incorporated with the information in the capital market. 2013 2012 2011 2010 2009 Dividend per share 10.19p 9.52p 8.90p 8.31p 7.77p EPS 15.65p 13.74p 16.75p 16.11p 17.17p Still, increase in cash dividends does not always give a good signal to the investors. Particularly when Vodafone

MoGen On January 10, 2006 the managing director of Merrill Lynch’s Equity- Linked Capital markets Group, Dar Maanavi, was reviewing the final drafts of a proposal for a convertible debt offering by MoGen, Inc. As a leading biotechnology company in the United States, MoGen had become an important client for Merrill Lynch over the years. In fact, if this deal were to be approved by MoGen at $5billion, it would represent Merrill Lynch’s third financing for MoGen in four years with proceeds raised

so forth. Dann (1981) and Masulis (1980) in their investigations of delicate offers have proposed and tried individual duty theory to illustrate the increment in firm esteem going to stock repurchases. Their study uncovered that the company's moguls who were in a high duty section, favored repurchases as a method for circulation since the cohorted capital additions are liable to lower charges (especially if deferred).the publication return reflected an increment in the after-assessment worth

on Torstar’s dividend policy, their repurchases and their strategy with regards to strategic acquisitions within their three business areas was composed. The memorandum included pros and cons as well as recommendations with regards to the issues to be discussed when the board gathered for their meeting. The dividend policy and the share repurchase strategy are the main issues since the institutional shareholders preferred Torstar’s historical share repurchases and historical dividend pay outs. Management

quarterly dividend from $.62 ($2.48 annual) a share to $.42. This was the first-ever dividend cut for a healthy utility, so the company did its best to explain to investors why it had taken such an unusual step. Table 1. ----------------------------------------------------------------------------------------- Year Dividend Earnings Dividend Dividend Earnings Dividend Dividend per share per share payout ratio payout (%) per share payout payout (%)

1. In theory, to fund an increased dividend payout or a stock buyback, a firm might invest less, borrow more, or issue more stock. Which of these three elements is Eastboro management willing to vary, and which elements remain fixed as a matter of policy? Management is willing to vary their investment (investing less) as well as issue more stock. This is not against their policy. But the management would not be willing to borrow more as their borrowing policy is limited to 40% debt to equity