Question: Kintore Biotech Ltd Kintore is a pub licly traded generic

Kintore Biotech Ltd. (Kintore) is a pub licly traded generic pharmaceuticals company. Extracts from the last five years' finan cial statements are shown below.Kintore completed an upgrade of its facilities in 2015 that was financed by a share issuance made in late 2014. Management believes that cash from operations should now be fairly stable and that net cash outflows on investing activities should range be tween $450,000 and $750,000 per year. Kintore's business is fairly stable, although there are significant uncertainties, such as the impact of new patent-protected drugs being introduced that are considered superior to Kintore's generic products. Kintore has ac cess to a $1,000,000 line of credit secured against accounts receivable that it hasn't used to date. After two years of satisfactory and steady performance since the upgrade was completed, the board of directors is considering a proposal to implement an annual common share dividend. Kintore has never paid dividends before.

It's now early 2018. The chair of Kintore's board of directors has asked you to prepare a report assessing the pros and cons of implementing an annual common share dividend.
Identify additional information needed to make a definitive decision. If you recom mend that a dividend should be paid, what amount per share should be paid? Provide support for yourpositions.

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  • CreatedFebruary 26, 2015
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