The March 15, 2010, edition of the Wall Street Journal includes an article by Martin Peers entitled

Question:

The March 15, 2010, edition of the Wall Street Journal includes an article by Martin Peers entitled “Media’s Cash Focus is Paying Dividends.”
Instructions
Read the article and answer the following questions.
(a) What action did Viacom take with its excess cash before it decided to consider paying dividends or stock buybacks?
(b) What percentage of does Time Warner pay out in dividends?
(c) Why might Viacom choose to pay a lower and instead use its excess cash for a stock buyback program?
(d) How might the payment of a steady, significant change the nature of shareholders that invest in media companies?
(e) What message might an increased or stock buybacks send to shareholders regarding what the company will do with excess cash now, as opposed to what it used to do with excess cash?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Free Cash Flow
Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...