Major Case Questions:

1. To what extent is Fuyao a value creator or a value destroyer, and what are the potential sources of that creation (or destruction)?

2. Is dividend policy irrelevant to Fuyao? If so, why? If not, why not?

3. Project Fuyao's cash flows for the next year under the conditions of dividend decrease, maintenance, and increase, using end-period cash balances or short-termborrowing as the "plug". How does assumptions about operating cash flows, capital structure, and IPO proceeds affect the dividend policy decision?

4. How do regulatory concerns, signaling to future investors in the upcoming IPO, and shareholder preferences affect Fuyao's dividend decision?

5. How has Cho's leadership affected the value of the company and the dividend policy of Fuyao?

6. Take the position of a Fuyao board member. Propose a dividend payout and future policy. Defend your proposal in light of your answers for questions 1 through 4. In a discussion that includes group members taking on the roles of other board members, come to a board decision on dividend policy.