This website uses cookies to ensure you have the best experience. Learn more

Linear Tech Essay

782 words - 4 pages

Dividend Policy at Linear Technology
case study

This case presents a decision to be made by management of Linear Technology about their dividend policy.
Company is 7th largest by market capitalization in the SOX. Linear technology went public in 1986 and declared first dividend on October 13, 1992. Dividend amount is $0.05 per share quarterly and there were 4 stock splits for now. Management have to decide whether to increase dividend since they have $1565.2M in cash or use it for share repurchase. The company has to analyse these two options to decide which is better for them and will enhance value of the shareholder.

There are few minuses in paying out cash as dividends. First is ...view middle of the document...

Stock repurchase, on the other hand, does not provide shareholders with clear information how much money they can receive as profit, but tax rates of capital gain is lower, so company saves money on taxes. Besides, in the industry company operates in it is very important to have long-term engineer employees so they can keep working on improving existing and making new semiconductors, and stock option compensation is quite efficient way to keep employees.
If the company will use all the cash to repurchase shares, share price will jump up to $136.85 per share($30.87(share price)*312.4M(# of shares outstanding) divided by (312.4M(# of shares outstanding – ($1565.2M(cash)/$30.87(price per share)). This price change may be significant as company is trying to keep share price at certain level so it is affordable for greater variety of investors. Including the fact that company used to use more money for stock repurchase than to dividend payout more often so I would reccomend to use twice money as was used to pay dividends.
Regarding the concern whether or not to increase Dividend Payout Ratio it is obvious that dividend policy of Linear Technology was such to show to investors that buying shares of the company...

Other Papers Like Linear Tech

Julia's Booth Essay

944 words - 4 pages Julia is a senior at Tech, and she’s investigating different ways to finance her final year at school. She is considering leasing a food booth outside the Tech stadium at home football games. Tech sells out every home game, and Julia knows, from attending the games herself, that everyone eats a lot of food. She has to pay $1,000 per game for a booth, and the booths are not very large. Vendors can sell either food or drinks on Tech property

Julia's Food Booth Essay

2741 words - 11 pages Running head: JULIA’S FOOD BOOTH 1 Case Study Julia’s Food Booth Susan Dawson Strayer University JULIA’S FOOD BOOTH 2 Case Study: Julia’s Food Booth In this case study, we are asked to determine if Julia Robertson, a senior at Tech, should

Merill Finch

5017 words - 21 pages 12.4 20.0 p r ˆ p  Chapter 8: Risk and Rates of Return Integrated Case 9 The expected rate of return on the portfolio is merely a linear combination of the two stock’s expe cted rates of return. However, portfolio risk is another matter.  p begins to fall as High Tech and Collections are combined; it reaches near zero at 40% High Tech; and then it begins to rise. High Tech and Collections can be combined to form a near zero

China Hollow Blow Molding Machine Market Report

650 words - 3 pages : Linear Series Shuttle Series Rotary Series Split by manufacturers, this report focuses on the sales, price of each type, average price of Hollow Blow Molding Machine, revenue and market share, for each manufacturer in 2015 and 2016. Top players, covering: Sidel (Tetra Laval) Sipa Jomar SMF Krones Bekum Graham Engineering KHS Aoki Technical Laboratory Magic Kautex (Textron) Automa BBM Techne Graham Uniloy Milacron(Milacron

Humans Are A Cancer Of The Earth

1353 words - 6 pages aforementioned four points of similarity between humans and cancer are clear-cut and difficult to refute. Additionally, Hern makes a valid point about the linear relationship between technology advancement and potential damage to the environment. When human technologies were in their nacent stages during the Pleistocene era, "small scale human assaults on the environment had little or no lasting impact" (Hern, 1). Yet in today's matrix of

Investigation Into Using Rice Husk as Major Raw Materials in Producing Particles Board

4091 words - 17 pages from two categories of rice husk particles (fine and coarse) . The additives concentration of was maintained at 3%. The physical and mechanical properties, such as Water absorption (WA), Thickness Swelling (TS), Linear Expansion (LE), Modulus of Rupture (MOR), and Modulus of Elasticity (MOE), of the boards produced were determined. The Particleboards produced exhibited mean values ranging from 50.13% to 44.11% for WA, 2.01% to 0.082% for TS

Maglev Train

4119 words - 17 pages . DEVELOPMENT HISTORY After the first Shinkansen line was constructed in 1964 between Tokyo and Osaka in Japan, of a faster train in future. The development of a Maglev train Table 1 shows JNRbegan to research the possibility using linear motor propulsion and non-contact running was a focus from the start. In December 1979, the Magiev achieved 323 mph on this short test track. I989. Thid new 26.9-mile test track has the possibility tral) Table 2


3272 words - 14 pages ;=.500 .612<=ln(RD/L)<=.712 USA Ln(GDP/L) = 3.947+.176Ln(k/L)+.734Ln(RD/L) R Square = .995 [t-stat] [3.797] [18.004] Adj R Square=.994 (p-value) = (.001) (.000) F = 1980.72 95% Confidence Interval .079<=ln(K/L)<=.273 .649<=ln(RD/L)<=.819 Regression Description These regressions are log-linear models that express the elasticity of GDP


4334 words - 18 pages as being composed of research, development, demonstration, and deployment, although it is abundantly clear that innovation is not a linear process - there are various interconnections and feedback loops between these stages, and often even the stages themselves cannot be trivially disaggregated. Innovation involves the involvement of a range of organizations and personnel (laboratories, firms, financing organizations, etc.), with different

Apple Communication

977 words - 4 pages is an opportunity to build communication and trust with their customers and they failed. The first signs of a collapsing brand are never sales numbers.  Once sales start dropping, it’s already too late. The spread of ideas and behaviors isn’t linear—it’s built onto and put together by several factors. Apple rose to prominence on the power of its hipster charm, portraying itself as a creative, irrepressible minority struggling against the


2267 words - 10 pages scale shifted downwards so that 0 K[1]= −273.15 °C, or absolute zero. Many engineering fields in the U.S., notably high-tech and US federal specifications (civil and military), also use the Kelvin and Celsius scales. Other engineering fields in the U.S. also rely upon the Rankine scale (a shifted Fahrenheit scale) when working in thermodynamic-related disciplines such as combustion. For a system in thermal equilibrium at a constant volume

Related Essays

Panera Bread Company Analysis

1256 words - 6 pages and the company could easily replace buyers in the market. Financial History and Growth Linear Technology showed solid growth and margins from 1998-2001. The company peaked in its sales, net income, and gross profit in 2001 when the tech industry was at an all-time high. However in 2000, the tech bubble burst and and net income fell 200% compared to the previous year. The U.S economy entered into a recession after the 9/11 terrorist

Linear Technology Dividend Policy Essay

2554 words - 11 pages dividend payout ratio of 27.6%. The firm’s management decided to increase the dividend in 2002 after the tech bubble burst in order to signal to investors that the firm remained confident in its business and had a positive cash flow. They also did not want to lose the income investors who lauded LLTC for its consistency. However, this put their payout ratio in the 25%-30% range. If Linear increased its quarterly dividend by another penny, it

Report On Rajesh Pratap Singh Ss 12

641 words - 3 pages an optimum balance. Ikkat with Pratap’s vision and styling now has reached new heights. This time, it seemed, Rajesh’s artistic side was at play. The palette had a mix of soft pinks, oranges, grays and metallic. The traditional drapes like sarees, dhotis were skillfully teamed with sleeker belts. Short dresses with kaftans sleeves gave a hint of practicality, keeping in mind the hi-tech lifestyle. Ikkat has a new meaning now—flamboyant! The rich

Electronic Materials Introduction To Semiconductor Devices

3598 words - 15 pages Lecture 1 Introduction to Semiconductor Devices Reading: Notes and Anderson2 Chapters 1.1-1.3, 1.7-1.9 Georgia Tech ECE 3080 - Dr. Alan Doolittle Atoms to Operational Amplifiers •The goal of this course is to teach the fundamentals of non-linear circuit elements including diodes, LEDs, LASER diodes, transistors (BJT and FET) , and advanced device concepts such as microwave compound semiconductors and state of the art devices