Last Review Flashcards
Lecture 5: What are the 3 dividend clienteles formed by the imputation tax system in relation to dividends
- ) Tp < Tc: Franked Dividend
- ) Tp > Tc: Capital gains OR dividends (Unclear depends on level of CAPITAL GAINS TAX)
- ) Foreign Investors: Cannot claim franked credits. May prefer capital gains tax depending on their own country.
Lecture 5: The 5 factors for dividend payout and what kind of policy it encourages
The First Time I’m Anal
T: Stable F: Residual: T: Stable >>> Franked (Tp Tc) I: Stable A: High Dividends
Lecture 5: Any advantages for DRP if it is a classical tax system
Yes, even though there is no claim to franking credits, it still allows high dividend payout without cash outflow.
Lecture 5: Share Buyback. Who benefits the MOST in an off-market buyback
Superannuation fund holders as they can claim more capital tax loss
Lecture 9: Divestiture. What is the additional reason
Address need for liquidity “Funds”
Lecture 9: What kind of companies conduct equity carve-out (especially)
Companies that require equity capital more than debt
Lecture 9: What kind of companies are able to undergo LBO
Can only be done with low business risk, general purpose, tangible assets, low growth businesses.
Lecture 9: How much do single-segment firms outperform multi-segment firms
By about 12-15%
Lecture 9: What are the 2 main motives for Restructuring
- ) Sharper Focus
2. ) Divest in low performing division
Lecture 10: Risk Management. What does it seek.
It reduces uncertainty. Depending on risk preference, it seeks to remove bad outcomes without affecting good outcomes
Lecture 10: VAR. What are the 3 factors
Time Period; Probability; VaR value
Lecture 10: VAR of 1 million and p = 5% MEANS
Loss of MORE THAN 1 million will occur on 5% of the days
