Session 23(MBA): Potential Dividends and Cash Balances
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In this shortened class, we moved on to look at how much a company can afford to pay out as dividend. This measure, that I titled FCFE, is the cash left over after taxes, reinvestment needs and net debt payments. When a company pays out less than its FCFE, it is accumulating cash, and we laid the foundations for analyzing dividend policy by asking the key question: do you trust managers with your cash? During the session, we applies this framework to the Disney, Vale and BP.. Post class test and solution attached Until next time! Slides: http://www.stern.nyu.edu/~adamodar/podcasts/cfspr16/Session23.pdf Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session23test.pdf Post class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session23soln.pdf
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