Written Report

The written report should address the 12 questions. The write-up should be no longer than four double-spaced pages inclusive of exhibits (such as tables, charts and figures). In addition to these four pages, you may have a cover page and another page (the last page of the write-up) that is an assessment of group member contributions. The sum of the group member contributions must total 100%. Please use an 11 point font with at least 1"margins. (Do not use a plastic cover for the report; staple the pages at the top left of the page).

In addition to the written report, you will be asked to make a 6-8 minute oral presentation during the last class period. You are encouraged to divide up the questions among your team members so that everyone in your group participates. Your grade may be adjusted up or down no more than a few points depending on the quality of your presentation and staying within the allotted time.

To receive an "A" grade on the report, it is expected that the report is well written and easy to read, interesting, provides a reasonable response to the 12 questions, discusses all relevant aspects of the process that are inconsistent with the course material, provides and comments on firm's explanation for inconsistencies, and makes a well thought out recommendation to improve the firm's capital budgeting process. A report graded as a "B" is one where it is mostly well written but has some rough spots, is fairly interesting to read, does not answer adequately some of the questions, and/or does not adequately discuss inconsistencies. A grade of "C" has multiple problems as described above.

IX. Experiential Learning Exercise

In this exercise, we will examine Linear Technology's dividend policy decision. For this exercise you will have one of three roles: (a) a member of a consulting team recommending the payment of dividends, (b) a member of a consulting team recommending the repurchase of the firm's common stock, (c) a member of the Board of Directors of Linear Technology. I will assign each team (of three or four students) to one of these three roles so there will be multiple teams doing (a) and (b). Set (c) will consist of six to eight members (two teams of three or four per team).

Consulting Teams: You will present your professional opinions and conclusions to the board of directors at the upcoming board meeting. You can expect to be asked questions by board members. Before you appear before the board, the team must have a one page summary of your arguments and findings prepared. There will be two sets of consulting teams. One set will recommend paying dividends and the other will be recommending repurchase of shares. You will be assigned to only one set. For the set recommending dividends, the choice is between (a) paying regular dividends or (b) paying a special dividend. Be specific with regard to the dollar amount of dividends in aggregate, dividends per share and the time frame for the payment of these dividends. For the set recommending the repurchase of shares, be specific with regard to the repurchase