Haveloche Corporation

In: Business and Management

Submitted By qowiyu
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HAVELOCHE CORPORATION
INTRODUCTION
Phil Grange, the CEO of Haveloche Corporation, have been asked to be a guest lecturer at Cokesbury College. One of the finance professors has specifically requested a discussion on Haveloche's dividend policy, hi preparation, Phil has reviewed several textbooks that Dr. Roche, the professor, has provided, and has printed out the history of dividends for the nine years that Haveloche Corporation has been publicly traded.
BACKGROUND
Haveloche Corporation was formed in 1989 as a research firm dedicated to innovative electronic design. Haveloche sells patents to large electronics manufacturing companies. For innovative inventions that are immediately useful to these electronics firms, Haveloche receives handsome gains. Many of the inventions and patents also wind up sitting on a shelf, even after Haveloche goes to the effort and expense of gaining the patent. Inventions that hit the jackpot make up for the losers over time, but the successes are sporadic and create large fluctuations in Haveloche's earnings.
The firm grew up very quickly until its initial public offering in June of 1994 due to several key patents that were snatched up by several large computer manufacturers. By 1994, there were 28 researchers in the Haveloche think-tank, and the firm had developed the reputation for cutting edge research with a market orientation. Haveloche was also one of the larger pure research firms, and appeared to have become large enough to ensure more frequent innovations and earnings that were not as volatile as smaller firms. Since the IPO, Haveloche's research capability grew until a high of 102 researchers was reached. In early 2001, Haveloche had reduce workloads and eventually had to reduce the number of researchers due to the economic downturn. Since early 2003, though, the firm seemed to be enjoying the high demand again, and…...

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