X hits on this document

57 views

0 shares

0 downloads

0 comments

6 / 12

EPS and Dividends

Dividends (share repurchase) are a function of…

Ability to pay:  Cash flow uncertainty

Decision to pay: Managerial uncertainty

Why does a manager retain earnings?

Has better investment opportunities than the shareholder

Makes a sub-optimal decision for the shareholder

What is a “better investment opportunity”?

Investment has a NPV>0

Document info
Document views57
Page views65
Page last viewedTue Jan 24 03:23:40 UTC 2017
Pages12
Paragraphs108
Words650

Comments