Chapter 4: Integrating Dividends and Repurchases into Valuation

In this section

• Valuing a Firm under Varying Payout Scenarios
  Explore how different dividend payouts and share repurchases influence firm valuation, with pro forma modeling, DDM/FCFE approaches, and scenario analysis.
• Double Taxation, Imputation, and Split-Rate Systems
  Explore different dividend tax regimes—including classical double taxation, imputation, and split-rate systems—and their impact on valuation, cost of equity, and payout decisions.
• Sustainable Dividends: Forecasting Dividend Coverage
  Explore sustainable dividends by examining free cash flow, earnings variability, capital requirements, and forecasting models, with practical insights, real-world examples, diagrams, and a practice quiz to solidify your understanding.
• Impact on Cost of Equity and Capital Structure
  Explore how dividend policy and share repurchases can reshape a firm’s cost of equity, WACC, and overall capital structure, highlighting real-world implications beyond Modigliani–Miller.
• Advanced Payout Vignette Exercises
  Master valuation techniques and time management for complex dividend and share repurchase scenarios, integrating DDM, FCFE, cost of equity, and WACC in real-world vignettes.