Fin4274 Advanced Financial Decision Assessment Answer

Page 2of 6Assignment BriefYour objective is to critically examine whether, over the long term, shareholders are better served by receiving cash dividends or capital gains (indirectly via stock buybacks) from their firm, supported by relevant evidences.Other Specific Instructionsfor this AssignmentSpecifically,you will need to:1.Conduct a literature review on dividend practices (e.g. amount, pay-out, div yield, frequency, etc.) of public companies based in one of the following countries (U.S., U.K., Australia, Malaysia or Singapore), their rationales for distributing cash dividends, its tax effects (if any) andoverall impact on long-term* stock returns;as well as an example of a well-known company that distributes dividends regularly, etc. You are to select key research results from various journal papers and books to demonstrate your understanding of these matters(approx. 700 –800 words);2.Next, conduct a literature review on stock buyback practices (e.g. amount, % of market cap, frequency, etc.) of public companies based in your chosen country as above, their rationales for stock buybacks, its tax effect (ifany) and overall impact on long-term stock returns;as well as an example of a well-known company that repurchase shares regularly etc. Again, you are to select key research results from various journal papers and books to demonstrate your understanding of these matters(approx. 700 –800 words);3.Based on your research above, critically evaluate which of the above capital return program is better in terms of its impact on overall stock return. In addition, you should propose any relevant recommendations that may further enhance the returns for shareholders, whether in terms of cash dividends or stock repurchases