Fiance decision making case analysis

Case 4B: Dividend Policy of Linear Technology

HBS Case 9-204-066.

In 1992, Linear Technology, a designer and manufacturer of analog semiconductors, initiated a dividend. The firm increased its dividend by approximately $0.01 per share each year thereafter. In fiscal year 2002, Linear experienced its first significant drop in sales since its 1986 initial public offering. Sales dropped by 47%, and profits fell by 54%. In the spring of 2003, CFO Paul Coghlan is deciding whether to recommend yet another increase in dividends to lift Linear’s payout ratio to 33.1%, high by the standards of technology firms.

Case Questions

You should provide a short report (not more than 5 pages, double-spaced) developed around the following questions:

  • Describe the payout policy of Linear Technology.
  • Why do firms pay dividends? Why has the rate of dividend initiations changed over time?
  • Should Linear return cash to its shareholders?
  • If Linear were to pay out its entire cash balance as a special dividend, what would be the effect on value? On the share price? On earnings? On earnings per share?
  • What if Linear repurchased shares instead?
  • What should Paul Coghlan recommend to the board?

p(5)

Place your order now to enjoy great discounts on this or a similar topic.

People choose us because we provide:

Essays written from scratch, 100% original,

Delivery within deadlines,

Competitive prices and excellent quality,

24/7 customer support,

Priority on their privacy,

Unlimited free revisions upon request, and

Plagiarism free work,

 

Order Similar Assignment Now!

  • Our Support Staff are online 24/7
  • Our Writers are available 24/7
  • Most Urgent order is delivered within 4 Hrs
  • 100% Original Assignment Plagiarism report can be sent to you upon request.

GET 15 % DISCOUNT TODAY use the discount code PAPER15 at the order form.

Type of paper Academic level Subject area
Number of pages Paper urgency Cost per page:
 Total: