COLLEGE OF

BUSINESS ADMINISTRATION
AND ACCOUNTANCY

REFLECTION JOURNAL in STRATEGIC FINANCIAL MANAGEMENT

NAME: Cyrille Jeah P. De Peralta COURSE/YEAR: BSBA FM 3 SECTION: F

STRATEGIC MATRIX No. 1

1. Identify, describe and explain the new insights in the article. 1. New knowledge gained in the article.

 The article provides insights into the significance of dividends for

investors and companies, outlining how dividends are a form of
reward for shareholders and an indicator of a company’s financial
health.
 It emphasizes that dividends are not just limited to cash payments
but can also be distributed as shares of stock, offering flexibility in
how companies reward their shareholders.
 The importance of dividend payment dates (announcement, ex-
dividend, record, and payment dates) in determining eligibility for
receiving dividends is highlighted.
 The impact of dividend announcements on stock prices is
explained, with an example illustrating how a company’s stock
price may increase after a dividend declaration.
 The article discusses the reasons why companies pay dividends,
touching upon the signaling effect on a company’s performance
and investor trust.
 The article introduces the perspective of economists Merton Miller
and Franco Modigliani, who argue that a company’s dividend
policy is irrelevant according to their dividend irrelevance theory.
 Dividends are often distributed quarterly and may be paid out as cash or in the
form of reinvestment in additional stock.
 Dividends can be paid at a scheduled frequency, such as monthly, quarterly, or
annually.
 Companies can also issue non-recurring special dividends, either individually or in
addition to a scheduled dividend.
 Dividends paid by funds, such as a bond or mutual funds, are different from
dividends paid by companies. Funds employ the principle of net asset value
(NAV), which reflects the valuation of their holdings or the price of the assets that
a fund has in its portfolio.
 The dividend rate can be quoted in terms of the dollar amount each share receives
as dividends per share (DPS)

Note: Do not change the format in this matrix. CBMEC 102 – Strategic Financial Management
 COLLEGE OF
BUSINESS ADMINISTRATION
AND ACCOUNTANCY

2. What do you think are the theories that can be applied in the 2. New theories that can be used in practice for decision making.
field of financial management?
 Total Return Factor: In addition to the traditional dividend, the article introduces
 Dividend Irrelevance Theory: The article mentions the viewpoint the total return factor as an important performance measure. This factor accounts
of economists Miller and Modigliani, who argue that a company's for interest, dividends and increase in share price, providing a more
dividend policy is irrelevant to its stock price or cost of capital. comprehensive vie of investment returns.
This theory suggests that investors can create their own synthetic  Tax Considerations: The article introduces the idea that tax
dividends by buying or selling shares. considerations are important when investing in dividend gains.
 Dividend Discount Model (DDM) and Gordon Growth Model:
Investors may prefer dividend-paying stocks in regions with lower
These models are mentioned as techniques for choosing stock tax rates on dividends, influencing decision-making for investment
investments based on anticipated future dividend streams. They are locations.
commonly used to value shares in terms of their expected future
dividends.
Overall, the article provides a comprehensive overview of dividends, their
impact on stock prices, and the various considerations and theories
relevant to financial management and investment decision-making.

STRATEGIC MATRIX No. 2

Direction: Identify the financial STREGHTS, WEAKNESSES, OPPORTUNITIES, and THREATS of each alternatives using strategic matrix 1.

STRENGTHS
 Dividend Policy Flexibility:
Companies have the flexibility to
choose how they distribute dividends,
whether in cash or as shares of stock,
allowing them to align with their
financial goals and shareholder
preferences.
 Established Dividend Payment
History: Companies with a history of
regular dividend payments, especially
in sectors like basic materials, oil and
INTERNAL
FINACIAL DECISION
 Dividend Declaration: Deciding on the frequency and
amount of dividend payments is a crucial financial
decision. It involves balancing the interests of
shareholders, maintaining financial health, and
signaling the company’s performance.
WEAKNESSES
 Dividend Obligation: Regular dividend
payments can become a financial burden during
periods of low profitability or economic
downturns, potentially leading to pressure on the
company’s cash reserves.
 Risk of Misinterpretation: A reduction in
dividend amounts or a decision against a
dividend payment may be misinterpreted by
investors as a sign of trouble, impacting the
company’s stock value.

Note: Do not change the format in this matrix. CBMEC 102 – Strategic Financial Management
 COLLEGE OF
BUSINESS ADMINISTRATION
AND ACCOUNTANCY

gas, banks, healthcare, and utilities,

can build trust and attract investors
seeking stable returns.
 Strategic Dividend Timing:
Companies can strategically choose
when to announce dividends,
influencing stock prices positively and
demonstrating confidence in their
financial performance.
EXTERNAL
OPPORTUNITIES FINANCIAL DECISION THREATS
 Tax Considerations: Companies can  Global Investment Strategy: Deciding on the  Economic Downturns: Economic downturns
take advantage of tax policies in geographical distribution of dividends based on tax may affect a company's ability to maintain
different regions to attract investors. considerations can be a strategic financial decision. regular dividend payments, potentially leading
Offering dividends in regions with This decision can attract international investors to a loss of investor confidence.
lower tax rates on dividend income seeking favorable tax treatment on dividends.  Market Misinterpretation: Changes in dividend
may be an opportunity to attract policies, even if strategically planned, may be
investors. misunderstood by the market, leading to short-
 Strategic Dividend Timing: term stock price declines or negative
Announcing dividends strategically perceptions. This misinterpretation can pose a
during positive financial periods can threat to the company's overall financial health.
attract new investors and positively
influence the company's image.

Note: Do not change the format in this matrix. CBMEC 102 – Strategic Financial Management