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Case 4B: Dividend Policy of Linear Technology: Write a short report (not more than 5 pages, double-spaced), developed around the following: Describe the payout policy

Case 4B: Dividend Policy of Linear Technology:

  • Write a short report (not more than 5 pages, double-spaced), developed around the following:
    1. Describe the payout policy of Linear Technology.
    2. Why do firms pay dividends? Why has the rate of dividend initiations changed over time?
    3. Should Linear return cash to its shareholders?
    4. If Linear were to pay out its entire cash balance as a special dividend, what would be the effect on value? On the share price? On earnings? On earnings per share?
    5. What if Linear Technology repurchased shares instead of providing a pay out?
    6. What should Paul Coghlan recommend to the board?

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