Analysis of Dividends and Share Repurchases (2024 Level II CFA® Exam –Corporate Issuers–Module 1)

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Topic 3 – Corporate Issuers
Module 1 – Analysis of Dividends and Share Repurchases
0:00 Introduction and Learning Outcome Statements
2:38 Describe the expected effect of regular cash dividends, extra cash dividends, liquidating dividends, stock dividends, stock splits, and reverse stock splits on shareholders’ wealth and a company’s financial ratios;
12:48 Compare theories of dividend policy and explain implications of each for share value given a description of a corporate dividend action;
20:56 Describe the types of information (signals) that dividend initiations, increases, decreases, and omissions may convey;
25:34 Explain how clientele and agency costs may affect a company’s payout policy;
31:32 Explain factors that affect dividend policy in practice;
33:40 Calculate and interpret the effective tax rate on a given currency unit of corporate earnings under double taxation, dividend imputation, and split-rate tax systems;
36:16 Compare stable dividend, constant dividend payout ratio, and residual dividend policy and calculate the dividend under each policy;
42:14 Compare share repurchase methods;
50:38 Calculate and compare the effect of a share repurchase on earnings per share when 1) the repurchase is financed by the company’s surplus cash and 2) the company uses debt to finance the repurchase;
56:25 Calculate the effect of a share repurchase on book value per share;
57:37 Explain the choice between paying cash dividends and repurchasing share;
1:02:30 Describe broad trends in corporate payout policies;
1:03:41 Calculate and interpret dividend coverage ratios based on 1) Net income and 2) Free cash flow;
1:06:43 Identify characteristics of companies that may not be able to sustain their cash dividend.