Eastboro Corporation

STATEMENT OF THE PROBLEM Although this case presents some(prenominal) different issues to consider, the rudimentary problem is the indemnify implementation of Eastboros divid wipeout insurance policy. Eastboro was founded as a manufacturer of machine parts, and has traditionally paid a sanely substantial dividend. However, in new-fangled years, the core focus of the company has shifted toward technology in the palm of computer-aided design and manufacturing, highlighted by its latest development, artificial Workforce. This shift in the focus of Eastboro has brought about some monetary changes as well. With revenues falling, they demand missed two quarters worth of dividend payments, and make believe promised to try to lay out repayment of them by the end of 2001. However, to do this, they may require to borrow m unitaryy, non only in 2001, but in the next several(prenominal) years. Eastboro has always been debt averse, so this is an unsettling prospect for them. thither ar several options being discussed, such as a zero-dividend payout, a 40% payout, and a residual payout policy. This major issue, as well as what direction the firm is going, and whether that corresponds to the wishes of current shareholders are the main issues needing to be addressed by Ms. Campbell. FACTS         Current dividend policy = 40%         Attacks on World Trade Center and Pentagon occurred one week previous         Stock has fallen 18% since attacks         Firm has attached itself to resuming dividend payout, presumably in 2001         Potential name change to Eastboro in advance(p) Systems International, Inc.

        Rated as an A company by Value Line          fresh decline in net revenues and profit margins         Future world(prenominal) reaping is expect         Involved in high cyclical environment          tax revenue domestic product expected to fall from 4% to 1.6%         Largest % of several(prenominal) investors are focused on retirement needs         Largest % of institutional investors are value-oriented         Management expects growth of 15%         CAD/CAM and cutting... If you inadequacy to get a ample essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper