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dividend payout may not be as lucrative to prospective and existing investors, a Zero payout will
improve spending on cash towards advancing the company’s technology and a future in
CAD/CDM. Improving the company’s technology will be a significant positive factor for the
company in the future as there will be an improvement in the number of orders placed and sales
coming. Through this method, over a certain number of years, Rockboro Machine Tools
Corporation will have less excessive debt and the possibility of given a dividend payout to
investors with a more positive future outlook. The negative outlook is that capital investors may
Based on a 40% company dividend policy, the amount of debt will increase due to an
increase in dividends, but dividend capital investors will be pleased with the corporation.
Through this policy, the proponents have their basis on a positive increase in orders and sales
and the prospect for more capital investors to invest in the corporation as the company will be on
par with the 40% average electronical-industrial-equipment industry. As justified by Exhibit 26.2
and Exhibit 26.8, the 40% Target Dividend Payout will increase the amount of liabilities
projected 3 years (Exhibit 26.2) and 7 years (Exhibit 26.8) and there will be no money to
Corporation, at its present state. Giving a 50% dividend policy, based on the company’s present
state, there will be complete liabilities for the company and the company will essentially become
need to have stock buybacks. Without a significant input of profit from advanced technology or
other departments of the company with significant profits, this policy cannot be implemented.