Eastboro Corporation

STATEMENT OF THE PROBLEM Although this case presents several(prenominal)(prenominal) different issues to consider, the inherent problem is the indemnify implementation of Eastboros divid leftover insurance policy. Eastboro was founded as a manufacturer of machine parts, and has traditionally paid a passably substantial dividend. However, in new-fangled years, the core focus of the company has shifted toward applied science in the palm of computer-aided design and manufacturing, highlighted by its latest development, simulated Workforce. This shift in the focus of Eastboro has brought about some financial changes as well. With revenues falling, they demand missed two quarters worth of dividend payments, and hire promised to try to lay out repayment of them by the end of 2001. However, to do this, they may require to borrow m unitaryy, not only in 2001, but in the next several years. Eastboro has always been debt averse, so this is an unsettling prospect for them. th ither ar several options being discussed, such as a zero-dividend payout, a 40% payout, and a residual payout policy. This major issue, as well as what direction the firm is going, and whether that corresponds to the wishes of current shareholders are the main issues needing to be addressed by Ms. Campbell. FACTS         Current dividend policy = 40%         Attacks on World Trade Center and Pentagon occurred one week front         Stock has fallen 18% since attacks         Firm has attached itself to resuming dividend payout, presumably in 2001         Potential name change to Eastboro in advance(p) Systems International, Inc.

        Rated as an A company by Value Line          new-fangled decline in net revenues and profit margins         Future world(prenominal) reaping is anticipate         Involved in high cyclical environment          uncouth domestic product expected to fall from 4% to 1.6%         Largest % of man-to-man investors are focused on retirement needs         Largest % of institutional investors are value-oriented         Management expects growth of 15%         CAD/CAM and cutting... If you pauperism to get a ample essay, order it on our website: OrderCustomPaper.com

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