The two Guys experienced gone to high school alongside one another and were disenchanted with their prospective buyers as mechanics at a farm equipment manufacturer. If Swenson chooses to pay out dividends, she will have to also choose the magnitude of the payout. A subsidiary concern is if the firm need to embark over a marketing campaign of corporate-image promoting, and change its corporate title to reflect its new outlook.
Executive Methods for Problem Solution This blog is about new ideas which give us new methods and new theorems as the tools to break complex problems in all fields such as Strategic Management, Engineering, Financial Management and so on and finally to solve these problems in the real world in which there is the balance of the cost and the time.
The Dividend Policy This case is about the impact of an environmental factor External issue on dividend policy of the firm Internal issue. The environmental disaster was Hurricane Katrina which was caused the huge destruction across the south-eastern United States.
Because of the storm, the stock market notably fell down. Since it is possible that the price of the shares once more increase even more than before in the near future, Ashley Swenson, chief financial officer CFO of Gainesboro Machine Tools Corporation has the dilemma to buy back stock or to spend the money as dividend the shareholders.
In fact, the question is: How can she forecast the fortune of the stock market? In the other word, what are the driving forces as the external factors which are affecting on internal factors such as dividend policy?
At the first, she can design a strategic plan including current and future BCG matrix. I think that one of the best reference books which has established a logical relationship between BCG matrix and Dividend policy is: Where is the location of the firm in BCG matrix?
On the other hand, if we see Exhibit 7, we will find that the expected growth rate of sales next years for high dividend payout companies is going down whereas the zero-payout companies will have the high growth rate of sales. We can observe this fact on consolidated Income Statement of Gainesboro Exhibit 1 where the negative growth rate from to accompanied by dividend payout has pushed the current situation of this company on Quadrant IV of BCG matrix which is named Dogs.
It means that the current strategies of Gainesboro could be Retrenchment, Divestiture, and Liquidation. In this case, the new situation of company will be on Quadrant I of the BCG matrix Question Marks where the dividend policy of this company should be Zero — dividend payout.
Here, I would like to bring you so many logical reasons which approve the Zero — dividend payout as the best option for dividend policy of Gainesboro as follows: I calculated them in accordance with Exhibit 2 please see my spreadsheet below cited:Dividend Policy Case (Gainesboro Machine Tools)-Session 2-Group 8 - Free download as Powerpoint Presentation .ppt /.pptx), PDF File .pdf), Text File .txt) or view presentation slides online.
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The case serves as an omnibus review of the many practical aspects of the dividend and share buyback decisions, including (1) signaling effects, (2) clientele effects, and (3) finance and.
The case serves as an omnibus review of the many practical aspects of the dividend and share buyback decisions, including (1) signaling effects, (2) clientele effects, and (3) finance and investment implications of increasing dividend payout and share repurchase decisions. of Gainesboro Machine Tools Corporation, paced the floor of her.
Case Study on Gainesboro Machine Tools Corporation - Free download as Word Doc .doc /.docx), PDF File .pdf), Text File .txt) or read online for free. Case Study on Gainesboro Machine Tools Corporation. GAINESBORO MACHINE TOOLS CORPORATION Synopsis and ObjectivesIn mid September , Ashley Swenson, the chief financial officer (CFO) of a large computer-aided design and computer-aided manufacturing (CAD/CAM) equipment manufacturer needed to decide whether to pay out dividends to the firmâ€™s shareholders, or to repurchase stock.