Publications

Article

Short-Termism and Capital Flows

By: Jesse M. Fried and Charles C.Y. Wang

During 2007–2016, S&P 500 firms distributed to shareholders $7 trillion via buybacks and dividends, over 96% of their aggregate net income, prompting claims that "short-termism" is impairing firms' ability to invest and innovate. We show that, when taking into account... View Details

Keywords: Short-termism; Quarterly Capitalism; Share Buybacks; Open Market Repurchases; Dividends; Equity Issuances; Seasoned Equity Offerings; Equity Compensastion; Acquisitions; Payout Policy; Capital Flows; Capital Distribution; Working Capital; Business and Shareholder Relations; Acquisition

April 2011
Article

Institutional Tax Clienteles and Payout Policy

By: Mihir Desai and Li Jin

This paper employs heterogeneity in institutional shareholder tax characteristics to identify the relation between firm payout policy and tax incentives. Analysis of a panel of firms matched with the tax characteristics of the clients of their institutional... View Details

Keywords: Institutional Investors; Clienteles; Payout Policy; Private Equity; Investment; Taxation; Ownership Stake; Business and Shareholder Relations

Read Now

October 1992 (Revised May 2004)
Background Note

Introduction to Owners' Equity

By: William J. Bruns Jr.

An introduction to accounting for owners' equity and leveraged buyouts. Covers classes of shareholders, treasury stock, stock distributions, and dividend accounting. View Details

Keywords: Ownership; Equity; Accounting

March 1989 (Revised August 1994)
Case

Avon Products

Avon Products announced both a change in its business focus and a reduction of its dividend in June 1988. To offset the likely stock price effect of the dividend reduction, Avon announced at the same time an unusual exchange offer, under which it would take up to 25%... View Details

Keywords: Diversification; Capital Markets; Corporate Finance; Consumer Products Industry

April 1975 (Revised December 1991)
Case

Consolidated Edison Co. (Abridged)

By: Thomas R. Piper

Faced with large external financing needs and a low stock price, Con Ed management must decide whether to pay a cash dividend in April 1974. Based on Consolidated Edison by G.C. Lodge. View Details

Keywords: Valuation; Decision Choices and Conditions; Financing and Loans; Energy Industry

2014
Chapter

Payout Policy

By: Joan Farre-Mensa, Roni Michaely and Martin Schmalz

We survey the literature on payout policy, with a particular emphasis on developments in the last two decades. Of the traditional motives of why firms pay out (agency, signaling, and taxes), the cross-sectional empirical evidence is most persuasive in favor of agency... View Details

Keywords: Finance; Investment; Financial Services Industry

SSRN

December 1999 (Revised August 2000)
Case

Superior Printing

By: Paul W. Marshall

Students must take the role of a family member who is the CEO of a commercial printing business. Discusses how you will finance growth and still maintain dividends for other family members. View Details

Keywords: Family Business; Business Growth and Maturation; Investment Return; Corporate Finance

December 1993 (Revised April 2006)
Case

Marriott Corporation (A)

By: Lynn S. Paine and Charles A. Nichols

Marriott Corp.'s chairman and CEO must decide whether to recommend a restructuring of the company to the board of directors. The proposal he is considering would split the Marriott Corp., a premier hotel developer, owner, and manager, into two separate companies by a... View Details

Keywords: Business or Company Management; Restructuring; Governing and Advisory Boards; Decision Making; Ethics; Management Teams; Business and Shareholder Relations; Accommodations Industry

July 1995 (Revised May 1997)
Case

Nutra Foods

By: David F. Hawkins

An investor reviews his equity investment and asks for help in understanding how the stock splits and dividends impact his investment and the company's stockholders' equity portion of the balance sheet. View Details

Keywords: History; Financial Management; Private Equity; Capital Structure; Valuation; Investment Return; Business and Shareholder Relations; Financial Services Industry; Food and Beverage Industry

December 1981 (Revised September 1986)
Case

Marriott Corp.

By: Thomas R. Piper

Marriott is considering the repurchase of ten million shares. This is apparently at odds with the financial policies that the Board of Directors passed two years earlier. Students must discuss why the policies were passed and why changes are now necessary. Includes a... View Details

Keywords: Stocks; Policy; Governing and Advisory Boards; Change; Financial Strategy; Valuation

December 1999 (Revised October 2006)
Case

Praedium Corporation

By: Henry B. Reiling and Catherine M. Conneely

George Hicks and Patricia Ferrey, primary shareholders of the Praedium Corp., faced a dilemma that could dissolve their real estate management company. Praedium received an attractive offer to lease one of its properties, however, Hicks did not want to terminate the... View Details

Keywords: Leasing; Property; Taxation; Investment Return; Real Estate Industry; Construction Industry

May 1987 (Revised October 1996)
Case

Murray Ohio Manufacturing Co.

By: Krishna G. Palepu

After a record year in 1983, Murray Ohio's earnings declined in 1984. The company was faced with competition from cheap imports and was experiencing declining margins. Students are asked to analyze the company's 1984 financial statements and predict whether there is... View Details

Keywords: Financial Statements; Financial Reporting; Business Divisions; Cost Management; Spending; Decision Making; Change Management; Problems and Challenges; Management Systems; Manufacturing Industry