[Solved] MiniCase IntegratedWaveguideTechnologies( | SolutionInn

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 08, 2024

MiniCase IntegratedWaveguideTechnologies(IWT)isa6-year-oldcompanyfoundedbyHuntJacksonandDavidSmithfieldtoexploitmetamaterialplasmonictechnologytodevelopandmanufactureminiaturemicrowavefrequencydirectionaltransmittersandreceiversforuseinmobileInternetandcommunicationsapplications.IWT'stechnology,althoughhighlyadvanced,isrelativelyinexpensivetoimplement,anditspatentedmanufacturingtechniquesrequirelittlecapitalascomparedtomanyelectronicsfabricationventures.Becauseofthelowcapitalrequirement,JacksonandSmithfieldhavebeenabletoavoidissuingnewstockandthusownalloftheshares.BecauseoftheexplosionindemandforitsmobileInternetapplications,IWTmustnowaccessoutsideequitycapitaltofunditsgrowth,andJacksonandSmithfieldhavedecidedtotakethecompanypublic.Untilnow,JacksonandSmithfieldhavepaidthemselvesreasonablesalariesbutroutinelyreinvestedallafter-taxearningsinthefirm,sodividendpolicyhasnotbeenanissue.However,beforetalkingwithpotentialoutsideinvestors,theymustdecideonadividendpolicy. YournewbossattheconsultingfirmFlickandAssociates,whichhasbeenretainedtohelpIWTprepareforitspublicoffering,hasaskedyoutomakeapresentationtoJacksonandSmithfieldinwhichyoureviewthetheoryofdividendpolicyanddiscussthefollowingissues.Whatresultshaveempiricalstudiesofthedividendtheoriesproduced?Howdoesallthisaffectwhatwecantellmanagersaboutdividendpayouts?

MiniCase

IntegratedWaveguideTechnologies(IWT)isa6-year-oldcompanyfoundedbyHuntJacksonandDavidSmithfieldtoexploitmetamaterialplasmonictechnologytodevelopandmanufactureminiaturemicrowavefrequencydirectionaltransmittersandreceiversforuseinmobileInternetandcommunicationsapplications.IWT'stechnology,althoughhighlyadvanced,isrelativelyinexpensivetoimplement,anditspatentedmanufacturingtechniquesrequirelittlecapitalascomparedtomanyelectronicsfabricationventures.Becauseofthelowcapitalrequirement,JacksonandSmithfieldhavebeenabletoavoidissuingnewstockandthusownalloftheshares.BecauseoftheexplosionindemandforitsmobileInternetapplications,IWTmustnowaccessoutsideequitycapitaltofunditsgrowth,andJacksonandSmithfieldhavedecidedtotakethecompanypublic.Untilnow,JacksonandSmithfieldhavepaidthemselvesreasonablesalariesbutroutinelyreinvestedallafter-taxearningsinthefirm,sodividendpolicyhasnotbeenanissue.However,beforetalkingwithpotentialoutsideinvestors,theymustdecideonadividendpolicy.

YournewbossattheconsultingfirmFlickandAssociates,whichhasbeenretainedtohelpIWTprepareforitspublicoffering,hasaskedyoutomakeapresentationtoJacksonandSmithfieldinwhichyoureviewthetheoryofdividendpolicyanddiscussthefollowingissues.Whatresultshaveempiricalstudiesofthedividendtheoriesproduced?Howdoesallthisaffectwhatwecantellmanagersaboutdividendpayouts?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Core Concepts

Financial Management Core Concepts

Authors: Raymond Brooks

4th Edition

ISBN: 134730417, 134730410, 978-0134730417

More Books

Students also viewed these Finance questions

Question

★★★★★

How many circuits are required to accommodate kitchen appliances in an average size home?

Answered: 1 week ago

Question

★★★★★

Cutler Corporation is authorized to issue 10,000 shares of common stock. It sells 6,000 shares at $19 per share. Required Record the sale of the common stock, given the following independent...

Answered: 1 week ago

Question

★★★★★

The New Data Source option is located in the _ _ _ _ _ _ tab.

Answered: 1 week ago

Question

★★★★★

Will something truly bad happen if I dont follow this value?

Answered: 1 week ago

Question

★★★★★

Each of the four independent situations below describes a capital lease in which annual lease payments are payable at the beginning of each year. Determine the annual lease payments foreach:...

Answered: 1 week ago

Question

★★★★★

Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 35,200 customers, but actually served 32,800 customers. The company uses the...

Answered: 1 week ago

Question

★★★★★

The Chartered Financial Analyst (CFA) designation is the de facto professional certification for the financial industry. Employers encourage their prospective employees to complete the CFA exam....

Answered: 1 week ago

Question

★★★★★

High-Low Method Tashiro Inc. has decided to use the high-low method to estimate the total cost a Units Produced 3,200 1,200 Total Costs $179,200 115,200 2,330 120,700 a. Determine the variable cost...

Answered: 1 week ago

Question

★★★★★

Classic hand pumps work by sucking air out and creating a vacuum the top of the pipe, which will drive the fluid up the pipe. In fact, it is similar to how we use a straw to drink liquids. What is...

Answered: 1 week ago

Question

★★★★★

You are planning to put up your own business. At that time, the craze was all about the Rubik's Cube. You are not sure if this will continue to be popular. Questions: Going back to the story, will...

Answered: 1 week ago

Question

★★★★★

Consider the flows in the Shouldice table shown below. Day In (afternoon of the day) Discharge (morning of the day) In the System Sunday (S1) 27 0 27 Monday (M1) 27 0 54 Tuesday (T1) 27 0 81...

Answered: 1 week ago

Question

★★★★★

1) A firm needed $500,000 total resources to operate a project that would yield them a profit. It has drafted two (2) alternatives in order to procure this amount. First alternative - invest $40,000...

Answered: 1 week ago

Question

★★★★★

Assume you are a network administrator. Your internal network has application servers that are accessed by inbound traffic from the Internet. You are considering several strategies. The strategy you...

Answered: 1 week ago

Question

★★★★★

When hypothesis testing, when might you use one-independent sample t- test versus a two-independent samples t- test? Provide an example of each for a proposed research study.

Answered: 1 week ago

Question

★★★★★

If there is an unrealized holding gain on available-for-sale investments, it is reported as?

Answered: 1 week ago

Question

★★★★★

Comparison of Full- Absorption and Variable Cost Income Statements with Overhead Variances: Refer to exercise 9-11 and assume that Okanagan Products debits or credits over- or underapplied overhead...

Answered: 1 week ago

Question

★★★★★

Comparison of Variable and Full-Absorption Costing: Analyzing Profit Performance: Eaton's Enterprises released the following figures from its records for Year 1 and Year 2: Required: a. Prepare...

Answered: 1 week ago

Question

★★★★★

Comparison of Full- Absorption and Variable CostingIncome Statement Formats: Consider the following facts: Required: Prepare comparative income statements, using the contribution margin format for...

Answered: 1 week ago

Previous Question Next Question