Increasing Shareholder Value: Distribution Policy, A Corporate Finance Challenge

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.

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. This book is concerned with how the corporation should reward its shareholders after the incomes are earned. Chapters where there are potentially complex mathematical relationships are divided into two parts. The body of the chapter has the relevant basic conclusions and numerical examples. The appendices to the chapter contains the derivation of the formulas that are used, if the derivations are not relatively intuitive. The appendices can be skipped if you are willing to accept the formulas used in the chapters.

Contents:

• An Overview of Corporate Distribution Policy
• Dividends Versus Retained Earnings
• Dividends Versus Share Repurchase
• Share Repurchase and Stock Price
• Choosing Between Real Investments and Share Repurchase
• The Return Earned by Share Repurchase
• Share Repurchase and Earnings Per Share Buyback Parity
• A Dividend Reduction Strategy
• The Investor’s Viewpoint
• Dividend Reinvestment Plans (DRIP’s)
• Repurchase of Shares Accompanied by the Selling of Puts
• A Ranking of Alternatives

Increasing Shareholder Value: Distribution Policy, A Corporate Finance Challenge By Harold Bierman pdf