Eastboro Corporation

STATEMENT OF THE PROBLEM Although this case presents several contrary issues to consider, the underlying problem is the pay off implementation of Eastboros dividend insurance policy. Eastboro was founded as a manufacturer of cable car parts, and has traditionally paid a fairly substantial dividend. However, in new-fangled years, the core focus of the conjunction has shifted toward technology in the deal of computer-aided design and manufacturing, highlighted by its up-to-the-minute development, Artificial Workforce. This shift in the focus of Eastboro has brought about some(prenominal) financial changes as salubrious. With revenues falling, they train missed two quarters worth of dividend payments, and have promised to try to drop 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 side by side(p) several years. Eastboro has always been debt averse, so this is an unsettling prospect for them. thither ar several options being discussed, such(prenominal) as a zero-dividend payout, a 40% payout, and a residue payout policy. This major issue, as well as what direction the fuddled is going, and whether that corresponds to the wishes of current shargonholders are the main(prenominal) issues needing to be addressed by Ms. Campbell. FACTS         Current dividend policy = 40%         Attacks on World throw Center and Pentagon occurred one calendar week prior         Stock has fallen 18% since attacks         Firm has attached itself to resuming dividend payout, presumptively in 2001         Potential cry change to Eastboro in advance(p) Systems International, Inc.

        Rated as an A company by Value Line          new-made reduction in net revenues and shekels margins         Future world(prenominal) reaping is expect         Involved in high cyclical environment          raw domestic product expected to fall from 4% to 1.6%         Largest % of individual investors are focused on retirement needs         Largest % of institutional investors are value-oriented         Management expects growth of 15%         CAD/CAM and cutting... If you want to give way a ample essay, collection it on our website: Ordercustompaper.com

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