五粮液派息除权案例

CORPORATE FINANCEInternational Finance College Lan Yu Ping(Associate Professor)0Chapter 14Dividends and Dividend Policy1Key Concepts and SkillsUnderstand dividend types and how they are paidUnderstand the issues surrounding dividend policy decisionsUnderstand the difference between cash and stock dividendsUnderstand why share repurchases are an alternative to dividends214 Chapter Outline14.1 Cash Dividends and Dividend Payment14.2 Does Dividend Policy Matter?14.3 Establishing a Dividend Policy14.4 Stock Repurchase:An Alternative to Cash Dividends14.5 Stock Dividends and Stock Splits314.1 Dividends Types“Two handed lawyer problem P420Pay high dividends?Pay low dividends?414.1.1 Cash DividendsRegular cash dividend cash payments made directly to stockholders,sometimes each quarterExtra cash dividend indication that the“extra amount may not be repeated in the futureSpecial cash dividend similar to extra dividend,but definitely wont be repeatedLiquidating dividend some or all of the business has been sold5五粮液派息除权案例 分红年度 分红方案说明每股收重点提示益(元)2006-12-31以总股本2711404800股为基数，0.432 公布日期:2007-04-25向全体股东10派人民币0.60元(股权登记日:2007-04-30含税)(税后0.140元)送4股 除权除息日:2007-05-08股息到帐日:2007-05-08红股上市日:2007-05-086714.1.2 Dividend PaymentTrading and settlement date-T+2?Declaration Date Board declares the dividend and it becomes a liability of the firmEx-dividend Date(除权日Ex:无权得到，不包括)Occurs two business days before date of recordIf you buy stock on or after this date,you will not receive the dividendStock price generally drops by about the amount of the dividendDate of Record Holders of record are determined and they will receive the dividend paymentDate of Payment checks are mailed8Figure 14.2 The Ex-Day Price Drop914.2 Does Dividend Policy Matter?Dividends matter the value of the stock is based on the present value of expected future dividendsDividend policy may not matterDividend policy is the decision to pay dividends versus retaining funds to reinvest in the firmIn theory,if the firm reinvests capital now,it will grow and can pay higher dividends in the future1014.2.1 Illustration of IrrelevanceExample on P423-424Wharton is all-equity firm and will dissolve in two years;The expected cash flow is$10000 in one year and$10000 in two years;Case 1:Expected dividends$100 in year 1 and$100 in year 2 Then the market value is$173.55(sum of present values of two years dividends).1114.2.1 Illustration of Irrelevance枝节问题Example on P423-424Case 2:Expected dividend is$110 in year one and therefore Wharton must raise$1000 by issuing 10 new shares at 10%yield.The expected dividend become$89 in year two(10000-1100)/100.Then the market value is also$173.55(sum of present values of two years dividends)If the company will earn the required return,then it doesnt matter when it pays the dividends1214.2.2 Low Payout？Why might a low payout be desirable?Individuals in upper income tax brackets might prefer lower dividend payouts,with the immediate tax consequences,in favor of higher capital gainsFlotation costs(筹资本钱)low payouts can decrease the amount of capital that needs to be raised,thereby lowering flotation costsDividend restrictions debt contracts might limit the percentage of income that can be paid out as dividends1314.2.3 High Payout？Why might a high payout be desirable?Desire for current incomeIndividuals in low tax bracketsGroups that are prohibited from spending principal(trusts and endowments 信托与养老保险)-they need to pay profit to the investment regularly.Uncertainty resolution no guarantee that the higher future dividends will materializeTaxesDividend exclusion for holders of corporations Tax-exempt investors dont have to worry about differential treatment between dividends and capital gains1414.2.4 Clientele Effect(客户效应)Some investors prefer low dividend payouts and will buy stock in those companies that offer low dividend payoutsSome investors prefer high dividend payouts and will buy stock in those companies that offer high dividend payouts。Clientele effect:the argument that stocks attract particular groups based on dividend yield and the resulting tax effects.1514.2.5 Implications of the Clientele EffectWhat do you think will happen if a firm changes its policy from a high payout to a low payout?What do you think will happen if a firm changes its policy from a low payout to a high payout?If this is the case,does dividend POLICY matter?1614.2.6 Information Content of DividendsStock prices generally rise with unexpected increases in dividends and fall with unexpected decreases in dividendsDoes this mean that the average investor prefers a high dividend payout ratio?No changes in the dividend send a signal about managements view concerning future prospects1714.3 Dividend Policy in PracticeFollowing are optional dividend policies:Residual dividend policy(剩余股息政策):the firms objective is to meet its investment needs and maintain its desired debt-equity ratio before paying dividends;Constant growth dividend policy dividends increased at a constant rate each yearConstant payout ratio pay a constant percent of earnings each yearCompromise dividend policy(折中股息政策)1814.3.1 Residual Dividend PolicyDetermine capital budgetDetermine target capital structureFinance investments with a combination of debt and equity in line with the target capital structureRemember that retained earnings are equityIf additional equity is needed,issue new sharesIf there are excess earnings,then pay the remainder out in dividends1914.3.1.1 Example Residual Dividend PolicyGivenNeed$5 million for new investmentsTarget capital structure:D/E=2/3Net Income=$4 millionFinding dividend40%financed with debt(2 million)60%financed with equity(3 million)NI equity financing=$1 million,paid out as residual dividendsThe new investment will be financed by 3m retained earning and 2m new debt,while the D/E ratio remains as 2/32014.3.2 Compromise Dividend PolicyGoals,ranked in order of importanceAvoid cutting back on positive NPV projects to pay a dividendAvoid dividend cutsAvoid the need to sell equityMaintain a target debt/equity ratioMaintain a target dividend payout ratioCompanies want to accept positive NPV projects,while avoiding negative signals2114.4 Stock Repurchase(股票回购)Company buys back its own shares of stockTender offer 标价收购 company states a purchase price and a desired number of sharesOpen market buys stock in the open marketExample on P430-431Similar to a cash dividend in that it returns cash from the firm to the stockholdersThis is another argument for dividend policy irrelevance in the absence of taxes or other imperfections2214.4.1 Real-World ConsiderationsStock repurchase allows investors to decide if they want the current cash flow and associated tax consequencesInvestors face capital gains taxes instead of ordinary income taxes(capital gains tax is lower)In our current tax structure,repurchases may be more desirable due to the options provided stockholdersThe IRS recognizes this and will not allow a stock repurchase for the sole purpose of allowing investors to avoid taxes2314.4.2 Information Content of Stock RepurchasesStock repurchases sends a positive signal that management believes that the current price is lowTender offers send a more positive signal than open market repurchases because the company is stating a specific priceThe stock price often increases when repurchases are announced2414.4.3 Stock Repurchase Announcement(公告)“America West Airlines announced that its Board of Directors has authorized the purchase of up to 2.5 million shares of its Class B common stock on the open market as circumstances warrant over the next two years“Following the approval of the stock repurchase program by the companys Board of Directors earlier today.W.A.Franke,chairman and chief officer said The stock repurchase program reflects our belief that America West stock may be an attractive investment opportunity for the Company,and it underscores our commitment to enhancing long-term shareholder value.“The shares will be repurchased with cash on hand,but only if and to the extent the Company holds unrestricted cash in excess of$200 million to ensure that an adequate level of cash and cash equivalents is maintained.2514.5 Stock Dividends and Stock splits(红股与拆股)Current stockholders receive extra shares in free.2614.5.1 Stock dividendsPay additional shares of stock instead of cash as dividends;Increases the number of outstanding shares;Small stock dividendLess than 20 to 25%If you own 100 shares and the company declared a 10%stock dividend,you would receive an additional 10 shares in freeLarge stock dividend more than 20 to 25%.Large stock dividend has the same effect as a stock split.2715.5.2 Stock Splits 拆股Stock splits essentially the same as a stock dividend except expressed as a ratioFor example,a 2 for 1 stock split is the same as a 100%stock dividendStock price is reduced when the stock splitsCommon explanation for split is to return price to a“more desirable trading range28Quick QuizWhat are the different types of dividends and how is a dividend paid?What is the clientele effect and how does it affect dividend policy relevance?What is the information content of dividend changes?What is the difference between a residual dividend policy and a compromise dividend policy?What are stock dividends and how do they differ from cash dividends?How are share repurchases an alternative to dividends and why might investors prefer them?29