Firms have stockpiled cash because of the pandemic. Why? What will they most likely use the cash for? Will it flow to investors (dividends, share repurchases)?
If you were in the C-suite, what would you recommend be done about the “problem” of so much cash? How would you spend it? How would you decide? Do you believe it is true that European “finance chiefs . . . are often more fiscally conservative than American counterparts”? If so, why do you think that is?
What are some of the reasons so many firms have increased dividends and share repurchases? What are some long term implications of this?
Why do firms try to keep dividend policies stable? If you were on the board of Goodrich, what concerns would you have about cutting the dividend?
If you were on the board of an oil firm, what factors do you consider in your dividend decision? Would you keep the dividend at the same level, or cut it?
If you can buy back stock to save the dividend yield, are you better off if you had to borrow the money to do the buyback? How does the deductibility of interest affect your analysis?
Why do US firms have so much cash “stashed”? Why is so much of it overseas? Why do you think firms favor capex and dividends over acquisitions and share repurchases? If you were the CFO, what are some of the factors that you would consider in deciding what to do with the cash?
What do cuts in dividends suggest about a firm’s future? Why do you think AT&T may be considering selling “non core” assets? In your opinion, is this a good idea? What are the potential legal consequences for firms who divulge potential market-moving information at nonpublic “dinner meetings”?
Oracle has joined the list of firms paying special/early dividends to avoid the expected tax increase. What do you think will happen to future tax inflows to the government based on its decision to increase the tax rate on dividends? Do you agree with this statement: “if you tax it, you get less of it; if you subsidize it, you get more of it”?
What is your opinion about Costco’s borrowing the cash to pay shareholders the dividend before taxes on dividends increase? What are some of the ratios that will be affected by this change in capitalization?
Costco and other firms are declaring special dividends? Why? What does this bode for future dividends? Why? How might stock prices be affected?
AOL recently announced a special dividend and an accelerated share repurchase. Do you agree with their move? Why or why not? What’s the difference between a special dividend and a “regular” dividend?
Why do you think Mattel changed its dividend rate? Who in the firm would make this decision? What signal might it convey?
If you are the CEO of a publicly traded company, is it important to you to woo investors to buy your firm’s stock? Why exactly? Will increasing your dividend necessarily do this?
