Dividends

Q: What are the four key dates in dividend distribution?

declaration, ex-dividend, record, payment

what is a stock dividend

distribution of additional shares to shareholders

why do managers try to smooth dividends

to avoid cutting them later; shows long-term earnings confidence

in a perfect market, how does payout affect firm value

irrelevant according to MM

what is the tax advantage of repurchases over dividends

capital gains are taxed lower than dividend

what does dividend increase usually signal

confidence in future earnings and cash flows

why are repurchases more flexible than dividends

they can be adjusted without market panic

what happens on the ex-dividend date

buyers no longer receive the declared dividend

how do firms repurchase shares

market repurchases, tender offer, dutch auction, private negotiation