Eastboro Corporation

STATEMENT OF THE PROBLEM Although this case presents several variant issues to consider, the underlying problem is the correct implementation of Eastboros dividend insurance policy. Eastboro was founded as a manufacturer of form parts, and has traditionally paid a fairly substantial dividend. However, in new-fangled years, the core focus of the attach to has shifted toward technology in the cover of computer-aided design and manufacturing, highlighted by its a la mode(p) development, Artificial Workforce. This shift in the focus of Eastboro has brought about around financial changes as thoroughly. With revenues falling, they supplicate missed two quarters expense of dividend payments, and have promised to try to stick 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 as a zero-dividend payout, a 40% payout, and a eternal sleep payout policy. This major issue, as well as what direction the theater is going, and whether that corresponds to the wishes of current sh areholders are the chief(prenominal) issues needing to be addressed by Ms. Campbell. FACTS         Current dividend policy = 40%         Attacks on World workmanship Center and Pentagon occurred one hebdomad prior         Stock has fallen 18% since attacks         Firm has attached itself to resuming dividend payout, presumptively in 2001         Potential bod change to Eastboro in advance(p) Systems International, Inc.

        Rated as an A company by Value Line          new-made come down in net revenues and shoot ahead margins         Future world(prenominal) reaping is expect         Involved in high cyclical environment          blunt domestic product expected to fall from 4% to 1.6%         Largest % of exclusive 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 get a ample essay, found it on our website: Ordercustompaper.com

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