d)
1)
Case summary:
Company I is founded to manufacture miniature micro wave frequency receivers and transmitters used in mobile internet and other communication applications. It is relatively less expensive and required less capital to manufacture these products. For this purpose, founders of company didn’t go for an IPO (initial public offerings).
Due to heavy demand situated for these products in the market, they must now access the outside equity capital to fund its growth. So before talking on outside investors, they must decide on a following aspects relating to dividend and distribution policies and other factors.
To discuss: Procedure followed by company when it makes a distribution through dividend payments.
2)
To discuss: Stock repurchase and procedure followed by company to make distribution of dividends through stock repurchase.
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Intermediate Financial Management (MindTap Course List)
- Describe the procedures a company followswhen it makes a distribution through dividendpayments.arrow_forwardWhich one of the following is a payment of either cash or shares of stock that is paid out of earnings to a firm's shareholders? Interest Distribution Dividend retained earningsarrow_forwardWhich of the following is classified as a financing activity? Receipt of dividend income Receipt of interest on loan receivable Payment of dividends Investment in another company’s stockarrow_forward
- What is the effect on the accounting equation when a stock dividend is declared? What is the effect on the accounting equation when a stock dividend is distributed?arrow_forwardWhat are the distributions to the stockholders by a firm called? A. retained earningsB. net incomeC. dividendsD. capital paymentsarrow_forwardTopic: Payout Policy What is the advantage(s) of dividends against retained earnings?arrow_forward
- Helparrow_forward4. From a practical point of view, according to financial compliance, dividends must be:a) Remuneration to creditors from company profits.b) Distributions to shareholders from company profits generated in the last period.c) Distributions to creditors and shareholders.d) Distributions among the shareholders from the profits of the company from its own origin.arrow_forwardPlease see attached imagearrow_forward
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