Title: dividend policy at fuyao glass

Use the following link to access the Case assigned:

https://hbsp.harvard.edu/import/721635

Case Synopsis

The case concerns dividend policy at Fuyao Glass Industry Group, Ltd., the leading manufacturer of auto glass in China and the world’s second-largest manufacturer of auto glass (early 2015). Fuyao was controlled by Cho Tak Wong, a man of humble, rural origins with little formal education, whose success came from business acumen, a strong service ethic, commitment to lifelong learning, industry focus, and good fortune.

Cho had been recognized as a leading philanthropist (2010) and EY Entrepreneur of the Year (2008 China). Fuyao had relatively modest cash balances but strong cash flows. Domestically, the company had little opportunity for investment, but Cho wished to become the leading auto-glass company in the world, so Fuyao was getting ready to enter production in both the United States and Russia. To raise the required capital, Fuyao was scheduling a global initial public offering (IPO) of its shares in Hong Kong (2015).

Cho had to decide, in early 2015, the size of its dividend distribution and whether Fuyao should change its residual, fluctuating dividend policy in light of it IPO.

Case study learning objectives

  1. The role of dividends in corporate finance
  2. How dividend policy affects the value of a company and the wealth of shareholders
  3. How to make a dividend decision based on analysis of financial statements, pro forma statements, capital structure, and dividend policies
  4. How to interpret the effect of leadership style on corporate performance and value.

Major Case Questions:

  1. To what extent is Fuyao a value creator or a value destroyer, and what are the potential sources of that creation (or destruction)?
  2. Is dividend policy irrelevant to Fuyao? If so, why? If not, why not?
  3. Project Fuyao’s cash flows for the next year under the conditions of dividend decrease, maintenance, and increase, using end-period cash balances or short-term  borrowing as the “plug”. How do assumptions about operating cash flows, capital structure, and IPO proceeds affect the dividend policy decision?
  4. How do regulatory concerns, signaling to future investors in the upcoming IPO, and shareholder preferences affect Fuyao’s dividend decision?
  5. How has Cho’s leadership affected the value of the company and the dividend policy of Fuyao?
  6. Take the position of a Fuyao board member. Propose a dividend payout and future policy. Defend your proposal in light of your answers for questions 1 through 4. In a discussion that includes group members taking on the roles of other board members, come to a board decision on dividend policy.
Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more