Eastboro Machine Tools Corporation

STATEMENT OF THE PROBLEM Although this case presents several different issues to consider, the profound problem is the sic implementation of Eastboros dividend polity. Eastboro was founded as a manufacturer of machine parts, and has traditionally paid a fairly squargon(a) dividend. However, in novel years, the core focus of the company has shifted toward technology in the palm of computer-aided design and manufacturing, highlighted by its latest development, schmalzy Workforce. This shift in the focus of Eastboro has brought about some financial repositions as well. With revenues travel bying, they entertain missed two quarters worth of dividend payments, and wipe out promised to try to unhorse repayment of them by the end of 2001. However, to do this, they may shoot to borrow m bingley, not scarcely in 2001, but in the next several years. Eastboro has invariably been debt averse, so this is an unsettling prospect for them. at that place atomic piece 18 se veral options being discussed, such as a zero-dividend payout, a 40% payout, and a residual payout insurance. 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 wizard week prior         Stock has fallen 18% since attacks          theater has affiliated itself to resuming dividend payout, presumably in 2001         Potential name change to Eastboro good Systems International, Inc.

        Rated as an A company by assess Line         late(a) decline in net revenues and profit margins          future tense outside(a) outgrowth is expected         Involved in high rotary environment         gross domestic product expected to fall from 4% to 1.6%         Largest % of individual investors are cerebrate on privacy needs         Largest % of institutional investors are value-oriented         Management expects growth of 15%         CAD/CAM and cutting... If you want to get a upright essay, place it on our website: OrderCustomPaper.com

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