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GAINESBORO MACHINE TOOLS CORPORATION

Overview
In mid September 2005, Ashley Swenson, the chief financial officer of
this large CAD/CAM equipment manufacturer must decide whether to pay out dividends to the firm¡¦s shareholders or repurchase stock. If
Swenson chooses to pay out dividends, she must also decide on the magnitude of the payout. A subsidiary question is whether the firm should embark on a campaign of corporate-image advertising and change its corporate name to reflect its new outlook. The case serves a review of the many practical aspects of the dividend and share buyback decisions, including(1) signaling effects, (2) clientele effects, and (3) finance and investment implications of increasing dividend payout and share repurchase decisions.

Critical Issues
Below are listed the various issues that Gainesboro is currently
facing. Issues are listed at random and in no order of importance.

1. Investor Relations:

2. Dividend Policy: Gainesboro needs to......

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Approximate Word Count: 1953
Approximate Pages: 8 (250 words per double-spaced page)

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