Financial Management Instructor‘s manual ch16.pdf

Chapter 16 Distributions to Shareholders: Dividends and Share Repurchases Learning Objectives After reading this chapter, students should be able to:  Explain why some investors like the firm to pay more dividends while other investors prefer reinvestment and the resulting capital gains.  Discuss the various trade-offs that companies face when trying to establish their optimal dividend policy.  Differentiate between stock splits and stock dividends.  List the advantages and disadvantages of stock repurchases vis-à-vis dividends from both investors’ and companies’ perspectives. Chapter 16: Distributions to Shareholders Learning Objectives 405 © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Lecture Suggestions We like this chapter and generally cover it in its entirety, but it could be omitted in the introductory course without loss of continuity. Or, sections such as stock dividends or stock repurchases could be omitted. What we cover, and the way we cover it, can be seen by scanning the slides and Integrated Case solution for Chapter 16, which appears at the end of this chapter solution. For other suggestions about the lecture, please see the “Lecture Suggestions” in Chapter 2, where we describe how we conduct our classes. DAYS ON CHAPTER: 3 OF 56 DAYS (50-minute periods) 406 Lecture Suggestions Chapter 16: Distributions to Shareholders © 2013 Cengage Learning. All R