Increasing Shareholder Value: Distribution Policy, a Corporate Finance Challenge

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Springer Science & Business Media, Sep 30, 2001 - Business & Economics - 151 pages
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Corporations earn incomes and amass wealth. There are many books offering advice how to increase the profitability of corporations by achieving excellence in operations and choosing the correct strategic path. Increasing Shareholder Value: Distribution Policy, A Corporate Finance Challenge is concerned with how the corporation should reward its shareholders after the incomes are earned.
Investment decisions, capital structure, and dividend policy must be coordinated so that the well being of the firm's stockholders is considered in the planning process. The corporate planners should realize that the individual investors are also making plans, and the corporation can assist this planning process by making its own financial plans and strategies well known.
 

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Contents

An Overview of Corporate Distribution Policy
1
Dividends Versus Retained Earnings
3
Dividends Versus Share Repurchase
21
Share Repurchase and Stock Price
43
Choosing Between Real Investments and Share Repurchase
67
The Return Earned By Share Repurchase
77
Share Repurchase and Earnings Per Share Buyback Parity
85
A Dividend Reduction Strategy
97
The Investors Viewpoint
111
Dividend Reinvestment Plans DRIPs
123
Repurchase of Shares Accompanied by the Selling of Puts
131
A Ranking of Alternatives
137
Index
149
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About the author (2001)

HAROLD BIERMAN Jr. has been a member of the Cornell faculty since 1956, and has taught at Louisiana State University, the University of Michigan, and the University of Chicago. He was a recipient of the annual Dow Jones Award from the American Assembly of Collegiate Schools of Business for outstanding contributions to collegiate business education. In 1985 Bierman served as a scholar-in-residence at the investment banking firm of Prudential-Bache and in 1990 he served as a Senior Academic Fellow at the Financial Accounting Standards Board. His industrial experience includes consulting with Corning Corporation, Eastman Kodak, Emerson Electric Co., IBM, AT&T, Anheuser-Busch, and Xerox Corp. Bierman is the author of twenty-six books, including Corporate Financial Strategy and Decision Making to Increase Shareholder Value (Wiley) and more than 160 journal articles.

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