What Additional Adjustments Are Required to Find the Share Price

question 22

Essay

What additional adjustments are required to find the share price, in case we are using the discounted cash flow model?

Recognize the limitations and flexibility in dividend payment policies.

Acknowledge the role of indentures and covenants in limiting dividend payments.

Understand the reasons why companies might choose stock repurchases over dividends and the tax implications.

Appreciate the strategic motives behind specific dividend policies and stock actions such as splits and repurchases.