Corporate Finance Spring 2025 - Session 23: Assessing Dividend (and Cash Return) Policy

In this session, we started by looking at a couple of good ones, including having an investor base that likes dividends using dividends as a signal and one borderline reason (that you can rip of lenders). We then looked at three questions that need to be asked in assessing dividend policy, starting with how much a company can afford to return to stockholders (FCFE), then looking at how much is actually returned in dividends and buybacks and finally assessing whether you trust management enough to give them the freedom to set dividend policy. We put this framework into practice by asking and answering these questions with the companies that we are examining in this class. Slides: https://nyu.box.com/s/tt25zwvwhusp86vgefmr79uxonjugoj2 Post class test: https://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session23test.pdf Post class solution: https://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session23soln.pdf