The Shareholder Distributions Handbook
22 Pages Posted: 20 Jan 2004 Last revised: 2 Oct 2009
Date Written: May 1, 2003
Abstract
Who, When, What & How? . . . In the face of recent events, dividend and share repurchase policies are now being rewritten:
Low interest rates and depressed equity returns put pressure on companies to increase shareholder distributions
A dividend renaissance is partly due to low yields elsewhere, and the perception of dividends as a safe haven in turbulent markets
Changes in accounting and public opinion have made conventional option-based repurchase programs much less attractive but new, accounting-friendly structures remain available
Open-market repurchase programs remain the best alternative to dividends and are especially appropriate for uncertain cash flows
Self tender offers (fixed price and Dutch Auction) remain the most effective mechanisms to create value through increased leverage or to signal an undervalued stock, or manage rapid change in ownership.
Keywords: Dividends, Share Repurchases, Share Buybacks, Shareholder Distributions, Recapitalizations, Self Tenders
JEL Classification: G35, G32
Suggested Citation: Suggested Citation