In 1996, Kodak paid a cash dividend of $1.60 per share. At year-end 1996, Kodak shares were trading at about $80 per share. Between 1997 and 2001, Kodak paid $1.76, and in 2002 raised its dividend to $1.80. Yet, despite the stable dividend payout, the price of Kodak stock steadily fell, reaching $27 in 2003. At that time, the firm announced its intention to reduce its dividend to about $.50 per share in order to invest $3 billion in digital technology purchases. Investors reacted to the announcement by bidding down Kodak shares by 14 percent. On October 21, 2003, The Wall Street Journal reported that some of Kodak's larger shareholders attempted to persuade Kodak executives to abandon their plan. Discuss this issue.© BrainMass Inc. brainmass.com October 25, 2018, 12:42 am ad1c9bdddf
The market price of any security is not determined by a single factor. Although in simplified valuation models we assume that we can determine the value of the firm based on current dividends and making an assumption about the future dividends. In the initial period of 1996-2003, the share price of Kodak was declining, as it was not able to do well good in the market. The industry in which it was operating was in matured phase or rather in decline phase and there were not enough growth opportunities available. Constant / increasing dividends provide two type clues to the market. 1. That the company is making good profits and hence they are ...
The market price of any security is discussed.
Reporting of Marketable Securitiesv
Developing Financial Reporting Objectives
As a means of becoming familiar with the nature and process of applied financial accounting research, consider the case study "An Exercise in Accounting for Marketable Securities" (Lynch, 2007). Next, using outside sources that you may seek and your professional experience, develop and write a 3 page paper concisely answering the following questions:
(A1.1) What might the company's financial reporting objective(s) be with respect to the marketable securities?
(A1.2) What potentially constrains management from meeting the objective(s)?
(A1.3) How can management meet the objective(s) given the constraint(s)?
(A1.4) What is the process used by accountants to consider such objectives and constraints when advising management?
(A1.5) How should accountants communicate their advice to management and what should be included in that communication?View Full Posting Details