Session 25 (Undergraduate): Potential Dividends and Cash Balances
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Episode description
In this session, we began by looking at bad reasons for paying dividends (more certain than capital gains, excess cash this year) as well as good reasons (investment clientele, signaling & debt/equity conflicts). We then came up with a measure of potential dividends (FCFE) and examined the consequences of paying out less or more to stockholders, and why some companies have more flexibility than others. Slides: http://www.stern.nyu.edu/~adamodar/podcasts/cfUGspr16/Session25.pdf Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session25atest.pdf Post class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session25asoln.pdf
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