The corporation has been wildly successful, in this, the third year of operation

Question

The corporation has been wildly successful, in this, the third year of operation. While operating in the social media advertising arena can be risky, the corporation has been able through strategic alliances and timely hires, to stay ahead of the profit curve. While the stock price continues to escalate since IPO, some shareholders grow weary of no dividends. A dividend would allow the firm to finally be listed on the NYSE, opening more capital potential to the firm. As is true with any technology firm, there are corporate raiders lurking hoping that management slips, so the firm can be swallowed up. Few shares are owned by the management team- only 12% of all outstanding shares. Approximately 20% of the firms shares are in treasury, not because of an under-subscription, but because the firm purchased shares for the last two years in a buyback. As the CFO of the firm, management turns to your leadership on strategic financial issues. Specifically, 1) what should the firm do about dividend policy- be specific, and 2) what can the firm do long-term to protect the organization from corporate raiders? (A two to five page report will satisfactorily meet this requirement)

Explanation / Answer

It is often claimed that the Babylonians (about 400 BC) were the first to solve quadratic equations. This is an over simplification, for the Babylonians had no notion of 'equation'. What they did develop was an algorithmic approach to solving problems which, in our terminology, would give rise to a quadratic equation. The method is essentially one of completing the square. However all Babylonian problems had answers which were positive (more accurately unsigned) quantities since the usual answer was a length. In about 300 BC Euclid developed a geometrical approach which, although later mathematicians used it to solve quadratic equations, amounted to finding a length which in our notation was the root of a quadratic equation. Euclid had no notion of equation, coefficients etc. but worked with purely geometrical quantities. Hindu mathematicians took the Babylonian methods further so that Brahmagupta (598-665 AD) gives an, almost modern, method which admits negative quantities. He also used abbreviations for the unknown, usually the initial letter of a colour was used, and sometimes several different unknowns occur in a single problem. The Arabs did not know about the advances of the Hindus so they had neither negative quantities nor abbreviations for their unknowns. However al-Khwarizmi (c 800) gave a classification of different types of quadratics (although only numerical examples of each). The different types arise since al-Khwarizmi had no zero or negatives. He has six chapters each devoted to a different type of equation, the equations being made up of three types of quantities namely: roots, squares of roots and numbers i.e. x, x2 and numbers. Squares equal to roots. Squares equal to numbers. Roots equal to numbers. Squares and roots equal to numbers, e.g. x2 + 10x = 39. Squares and numbers equal to roots, e.g. x2 + 21 = 10x. Roots and numbers equal to squares, e.g. 3x + 4 = x2.

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