Corporate Finance #15 Dividend Policy

Name: Corporate Finance #15 Dividend Policy
Rating: 4.6 (43 reviews)

Learn about factors involved in corporate dividend policy decisions from a certified public accountant (CPA)

Highest Rated

Created byRobert (Bob) Steele

Last updated 4/2024

English

English [Auto],

What you'll learn

Explain the factors involved when making corporate dividend policy decisions
Describe dividend policy as it relates to phases in the corporate life cycle
Discuss the impact shareholders have over dividend policy
Explain dividend payment terms
Compare stock dividends and cash dividends
Describe when a company may use stock dividends
Discuss the concept of a stock split
Explain when a company may use a stock split

Course content

3 sections • 42 lectures • 7h 56m total length

1805 Dividend Policy17:22
Examine how retained earnings and dividends shape a company's equity and shareholders' return, exploring dividend policy decisions, growth stages, and the balance between reinvestment and cash payouts.
1810 Other Things That Impact Dividend Policy17:29
Explore factors impacting dividend policy, such as cash flow position, retained earnings, tax laws, and access to capital markets, including debt or stock issuance.
1815 Dividend Payment Terms7:45
Explore how corporate dividend policy determines whether to retain earnings or issue dividends, and learn the ex-dividend date, holder of record date, payment date, and dividend yield versus dividend payout.
1820 Stock Dividend12:37
Explains stock dividends as a dividend policy option, comparing them to cash dividends and stock splits, and detailing effects on retained earnings, common stock, paid-in capital, and earnings per share.
1825 Stock Split13:33
Examine two-for-one and three-for-one stock splits and stock dividends, and how they affect equity, par value, retained earnings, and stock liquidity without changing company assets or liabilities.

OneNote Resource
1813 Payout Ratio14:21
Learn how to calculate the payout ratio from earnings and dividends, back into retained earnings on a per share basis, and analyze the balance sheet's equity section.
1814 Payout Ratio, Dividends Per Share, Dividend Yield6:07
Compute the payout ratio, dividends per share, and dividend yield from net income of 551,000 with a 30% payout and 1,000 shares at price 170, illustrating retained earnings implications.
1816 Retained Earnings & Dividend Limits12:29
Explore how retained earnings determine dividend limits, including legal constraints and practical cash limits. Analyze how dividends relate to stockholders' equity, common stock, and earnings within a corporate finance framework.
1817 Dividend Projection Life Cycle11:51
Projects dividend policy across a corporate life cycle—development, growth, expansion, maturity—using payout ratios and earnings per share to estimate per-share dividends and after-tax investor income.
1818 Stock Split & Stock Dividend15:27
Explore how stock splits and stock dividends alter equity components—common stock, capital in excess of par, and retained earnings—while keeping assets and liabilities in balance.
1819 Dividend Payout Policy Analysis11:02
Analyze two dividend payout policies over five years by calculating present value with differing discount rates; plan A offers stable dividends, plan B adds volatility and risk.
1820 Annual Dividend Yield, EPS, & Price Earnings Ratio7:46
Compute annual dividend yield, earnings per share (EPS), payout ratio, and price-earnings ratio from dividends per share and market price, using algebra to back into EPS.
1821 Earnings Per Share, Dividends Per Share, & Dividend Yield8:23
Learn to back into earnings per share, dividends per share, and dividend yield from market price, price-earnings ratio, and payout ratio through practice problems in one note.
1822 Ex Dividend Stock Price3:00
Calculate the ex-dividend stock price by subtracting the quarterly dividend from the 60 price, using a 7% annual yield to get 58.95.
1823 Stock Dividend & Cash Dividend Impact on Equity Section14:28
Explore how stock dividends and cash dividends affect the equity section, including effects on common stock, capital in excess of par, and retained earnings within the balance sheet.
1825 Dividends vs Investment Analysis10:37
Compare dividends versus reinvestment using a 14 percent return, compute earnings per share, and apply the price-earnings ratio to see how each choice affects the stock price.
1826 Dividend Policy Impact on Price or Stock Value7:01
Apply the dividend discount model to assess how dividend policy affects stock value, comparing plan one and plan two through changes in today’s dividend and growth rate.
1827 Stock Split 3 for 1 and 2 for 111:42
Explore how two for one and three for one stock splits affect the equity section, par value, and earnings per share, with no change to total equity or retained earnings.
1828 Stock Dividend Impact on Equity & Investor Value14:39
Analyze how a 10% stock dividend affects equity components—common stock, paid-in capital, and retained earnings—without asset changes, and its impact on earnings per share and investor value.
1829 Stock Dividend & Impact on Investor Holdings13:04
Examine a 12% stock dividend’s effect on investor holdings and equity, increasing common stock and paid-in capital while reducing retained earnings, with assets unchanged.
1830 Reverse Stock Split7:22
Analyze a one-for-five reverse stock split and how it reduces shares while boosting price. Examine the investor impact and potential market reactions.
1831 Stock Repurchase vs Cash Dividend7:36
Compare stock repurchases and cash dividends using excess cash; dividends per share are 2.5, while buybacks raise earnings per share and lift the stock price from 75 to 77.59.
1832 Dividend Payment Policy17:54
Develops dividend policy analysis in corporate finance by weighing net income, capital expenditures, and retained earnings against shareholder payouts. Explore cash and stock dividends, payout ratios, and policy trade-offs.

1813 Payout Ratio12:04
Learn how to compute the payout ratio from earnings and dividends using algebra, and explore alternative formulas to relate dividends, retained earnings, and earnings in practical Excel practice problems.
1814 Payout Ratio, Dividends Per Share, Dividend Yield7:18
Compute payout ratio, dividends per share, and dividend yield in corporate finance using Excel, and connect earnings, retained earnings, and per-share outcomes.
1816 Retained Earnings & Dividend Limits9:57
Learn to compute dividend limits from retained earnings and cash, using stockholders' equity, common stock, and earnings to set legal, practical, and payout ratio guidelines.
1817 Dividend Projection Life Cycle8:36
Explore an Excel dividend projection across the corporate lifecycle, applying stage-specific payout ratios and earnings per share to estimate dividends per share and after-tax income.
1818 Stock Split & Stock Dividend19:34
Explore how a two-for-one stock split and a ten percent stock dividend affect the equity section, including common stock, capital in excess of par, and retained earnings.
1819 Dividend Payout Policy Analysis12:34
Analyze two dividend payout plans in Excel, comparing present value of five-year cash flows under 11% and 15% discount rates; plan one's stability may yield higher value for stockholders.
1820 Annual Dividend Yield, EPS, & Price Earnings Ratio7:19
Compute annual dividend yield, earnings per share, and the price-earnings ratio from dividends per share, payout ratio, and market price in a practical Excel exercise.
1821 Earnings Per Share, Dividends Per Share, & Dividend Yield8:58
Solve a corporate finance practice problem in Excel to compute earnings per share, dividends per share, and dividend yield from market price, price-earnings ratio, and payout ratio.
1822 Ex Dividend Stock Price3:18
Compute ex-dividend stock price using an Excel worksheet by applying a 7% annual yield with quarterly dividends, reducing the 60 market price to 58.95.
1823 Stock Dividend & Cash Dividend Impact on Equity Section15:55
Learn how stock dividends and cash dividends affect the equity section, including effects on common stock, capital in excess of par, and retained earnings, with Excel-based practice.
1825 Dividends vs Investment Analysis10:51
Compare reinvesting earnings versus paying dividends and how each choice affects earnings per share and stock price through P/E ratio changes.
1826 Dividend Policy on Price of Stock Valuation8:27
Compare how changing dividends and growth rates affect stock value using the dividend valuation model, evaluating plan one (dividend increase, steady growth) versus plan two (dividend constant, higher growth).
1827 Stock Split 3 for 1 and 2 for 114:27
Analyze how 2-for-1 and 3-for-1 stock splits affect equity components, par value, shares outstanding, earnings per share, and market price, while keeping assets and liabilities unchanged.
1828 Stock Dividend Impact on Equity & Investor Value16:09
Explore how a 10 percent stock dividend affects the stockholders' equity, retained earnings, and per-share metrics, illustrating impacts on investor value and stock price through an Excel-based example.
1829 Stock Dividend & Impact on Investor Holdings19:36
Explore how a 12 percent stock dividend affects equity components, EPS, and investor holdings, adjusting common stock, capital in excess of par, retained earnings, and price-earnings implications.
1830 Reverse Stock Split9:11
Practice calculating a reverse stock split in Excel, determine the split ratio, post-split shares and price, and assess market reactions in a finance practice problem.
1831 Stock Repurchase vs Cash Dividend8:59
Compare a stock repurchase and cash dividend using a five million excess cash and two million shares, showing earnings per share and stock price under a price-earnings ratio of 30.
1832 Dividend Payment Policy20:05
Explore how to determine dividends using the marginal principle of retained earnings in an Excel model, balancing reinvestment returns against shareholder payout across multiple policies.

Requirements

Basic understanding of corporate finance concepts

Description

This course will cover corporate dividend policy.

We will include many example problems, both in the format of presentations and Excel worksheet problems. The Excel worksheet presentations will include a downloadable Excel workbook with at least two tabs, one with the answer, the second with a preformatted worksheet that can be completed in a step-by-step process along with the instructional videos.

Dividends represent earnings that a corporation distributes to owners. Dividends for a corporation can be compared do withdrawals from a sole proprietorship or partnership. However, there are substantial differences between a partnership withdrawal and a corporate dividend due to differences in the business structure.

A partner in a partnership generally has more control over the amount of draws they can take and when they can take them. Different partners may also draw different amounts at different times.

By contrast, a corporation must give uniform distributions of dividends to each class of shares, resulting in far less direct control by an individual shareholder to determine the amount of dividends or when they will be distributed.

The dividend distribution policy of a corporate can be very complex, involving many factors, including the life cycle of the company, the cash flow of the company, and the preferences of the shareholders.

A company that is in the growth phase of its life cycle is more likely to have smaller dividends, preferring to reinvest the money to grow operations. Shareholders who would like to invest over a longer time frame may like this policy because the increase in value of the company will increase the value of the shares.

A company in a mature phase of the life cycle may not have as much need to reinvest earnings and is more likely to distribute earnings to shareholders. Many investors like investing in dividend yielding companies because they receive a return on their investment in the form of dividends.

Who this course is for:

Business students
Business professionals

Corporate Finance #15 Dividend Policy

What you'll learn

Explore related topics

Course content

Introduction5 lectures • 1hr 9min

Practice Probs. - Dividend Policy19 lectures • 3hr 15min

Excel Probs. - Dividend Policy18 lectures • 3hr 33min

Requirements

Description

Who this course is for: