STATEMENT OF THE PROBLEM Although this case presents several different issues to consider, the underlying problem is the correct implementation of Eastboro's dividend policy. Eastboro was founded as a manufacturer of machine parts, and has traditionally paid a fairly substantial dividend. However, in recent years, the core focus of the company has shifted toward technology in the fields of computer-aided design and manufacturing, highlighted by its latest development, Artificial Workforce. This shift in the focus …
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showed last 75 words of 1580 total
…as a whole will perceive this move for what it is, a change in focus for a solid company with high potential for future growth. An alternative would be that people would look at the cut in dividends for a company who had historically paid them as a signal of weakness for Eastboro. We're going with the assumption that the name change, as well as proper marketing practices by Eastboro should adequately address this problem.