Dividend Recapitalization

[buells]

When I am playing a game with a lot of real estate, leverage is really important for calibrating ROE. It's fun to try to time the macroeconomic cycles. The problem is that my publicly traded shares all get bought up, so I can't buy back shares to return capital to shareholders and reduce stockholder's equity. Dividends are only allowed to be a percentage of earnings. I would like to be able to make a one time cash dividend to change my company's capital structure in one fell swoop.

[counting]

Interesting suggestion, but without company bond mechanism, who is going to carry the newly-created debt? The only borrower in game now is the central bank, so this essentially give the company extra borrowing credit.

Or are you only looking for a quick way to evenly reduce each shareholder's share by proportion, without the need to click each of them at premium price, thus able to get a prettier ROE ratio at the end of fiscal year?

[buells]

I just want to be able to issue dividends in excess of the company's net income for the year. I'm not looking to change the borrowing mechanism. Let's say I have a lot of cash sitting on the balance sheet; I may want to distribute it to shareholders to increase ROE. Otherwise, maybe I want to increase my leverage without expanding my operations. I could borrow money from the bank as I normally would and then issue a dividend.

[counting]

So game mechanism-wise, you wish to pay dividend exceed 100% of the net income? or just a fixed number of paid dividend sum instead of percentage?

I thought you also wish to restructure company's equity including reducing stockholder's shares, since you mentioned the public shares were all bought up.

BTW, if it's only for "beautifying" ROE, then it hardly resembles real life dividend recapitalization without involving debt carrier at the same time. The whole point is to offload financial risk to others and realize value in advance. But I guess the in game AI doesn't care about risk anyway, and can be programmed to believe whatever it "wants", so maybe it is possible to add a new mechanism to involve some form of borrowers and debtors AI system to carry them. (Just how realistic it would feel, and will it break the game balance and creating loopholes are the questions)

[standardplayer]

Check this out.

Special Dividends:
http://www.enlight.com/forum/viewtopic.php?f=37&t=5760

[colonel_truman]

When I am playing a game with a lot of real estate, leverage is really important for calibrating ROE. It's fun to try to time the macroeconomic cycles. The problem is that my publicly traded shares all get bought up, so I can't buy back shares to return capital to shareholders and reduce stockholder's equity. Dividends are only allowed to be a percentage of earnings. I would like to be able to make a one time cash dividend to change my company's capital structure in one fell swoop.

I believe your suggestion would make the game much easier, and I´m all for making it harder.
You can buy back shares, but they ask twice the market price for them. If they don´t want to sell your stock cheap you shouldnt be allowed to force them to do so.
Yes, that special dividend would be good to ruin one´s corp "in one fell swoop" and make the stock price fall, but you can always shut down your stores and factories, altough by doing so you as a shareholder will also suffer the consequences of such a decision.

[standardplayer]

Yes, that special dividend would be good to ruin one´s corp "in one fell swoop" and make the stock price fall, but you can always shut down your stores and factories, altough by doing so you as a shareholder will also suffer the consequences of such a decision.

What do you mean Special Dividend would "ruin one´s corp "in one fell swoop" "? A special dividend if done right should not ruin a corp it should simply distribute excess company cash to shareholders on a pro rated basis yes the share price would decrease by the distributed cash but, they get cash. Companies would also be able to increase their leverage ratio up a bit to maximize return on equity.

There would definitely need to be safeguards put in place so you can't distribute the entire equity of the corporation or all the cash.

Companies are not supposed to hoard cash they are supposed to maintain sufficient reserves and if they don't have anywhere to invest excess cash they should be able to distribute the excess cash to shareholders. They are also supposed to maintain a good debt to equity ratio to maximize return on equity. Companies Restructure their debt and equity and distribute excess cash all the time.

https://en.wikipedia.org/wiki/Dividend_recapitalization

[colonel_truman]

I meant that option would make it too easy for the player to increase its position in the company.
Anyway, i think two options are on the table regarding personal cash:

1- It s private individuals who donate to political parties.
2- Our character is bound to one corporation. We should be able to sell our corp and start some other business anew with our personal money.
2.1- maybe too far fetched, but why not become CEO of an existing AI controlled corp?