Collect financial information for 3 listed companies ( Index, Nike and Adidas would work) with a listing history of at least 15 consecutive years. Find out the payout policy each year, from the first year of public listing up till the latest year.
1) How have the companies returned cash to its owners? Have they paid dividends or bought back stocks? Describe how the companies’ dividend payout has been changing over time. Consider augmenting your discussions with a model (i.e. mathematical representation) of dividend payout.
2) Support your discussions of the following questions based on empirical evidence for firms in your sample. What factors do you think are associated with the individual companies’ dividend payout over time? What role do tax considerations play in the choice of payout vehicle (i.e., dividend or repurchases) and amount? Are agency conflicts between shareholders and managers at the core of corporate payout policy? Do payouts reflect attempts by the firm’s insiders to signal firm quality to the market?
3) Based on academic studies and your own empirical observation, summarize the key factors which may affect how payout policy varies from firm to firm, and over time. Are there other important motivations for payouts that the traditional literature has overlooked?
