Eastboro Corporation

STATEMENT OF THE PROBLEM Although this case presents some(prenominal)(prenominal) different issues to consider, the underlying problem is the indemnify implementation of Eastboros divid demise insurance policy. Eastboro was founded as a manufacturer of machine parts, and has traditionally paid a reasonably substantial dividend. However, in new-fangled years, the core focus of the company has shifted toward engine room in the palm of computer-aided design and manufacturing, highlighted by its latest development, sentimental Workforce. This shift in the focus of Eastboro has brought about some pecuniary changes as well. With revenues falling, they demand missed two quarters worth of dividend payments, and get under ones skin 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. thither 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 introductory         Stock has fallen 18% since attacks         Firm has attached itself to resuming dividend payout, presumptively in 2001         Potential name change to Eastboro in advance(p) Systems International, Inc.

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

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