CH 17 Payout Policy

Chapter 17
Payout Policy
Copyright © 2011 Pearson Prentice Hall. All rights reserved.

Chapter Outline
17.1 Distributions to Shareholders

17.2 Comparison of Dividends and
Share Repurchases
17.3 The Tax Disadvantage of Dividends
17.4 Dividend Capture and Tax Clienteles
17.5 Payout Versus Retention of Cash
17.6 Signaling with Payout Policy
17.7 Stock Dividends, Splits and Spin-offs

17-2
Learning Objectives
1. List two ways a company can distribute

cash to its shareholders.
2. Describe the dividend payment process
and the open-market repurchase process.
3. Define stock split, reverse stock split, and
stock dividend; describe the effect of
those actions on stock price.
4. Discuss the effect of dividend payment or
share repurchase in a perfect world.

17-3
Learning Objectives (cont'd)
5. Assuming perfect capital markets, describe

what Modigliani and Miller (1961) found about
payout policy.
6. Discuss the effect of taxes on dividend policy;
compute the effective dividend tax rate.
7. Provide reasons why firms might accumulate
cash balances rather than pay dividends.
8. Describe the effect of agency costs on
payout policy.
9. Assess the impact of information asymmetry on
payout policy.
17-4
17.1 Distribution to Shareholders
• Payout Policy
– The way a firm chooses between the
alternative ways to distribute free cash flow to
equity holders

17-5
Figure 17.1 Uses of Free Cash Flow

17-6
Dividends
• Declaration Date
– The date on which the board of directors
authorizes the payment of a dividend
• Record Date
– When a firm pays a dividend, only shareholders
on record on this date receive the dividend.

17-7
Dividends (cont'd)
• Ex-dividend Date
– A date, two days prior to a dividend’s record
date, on or after which anyone buying the
stock will not be eligible for the dividend
• Payable Date (Distribution Date)

– A date, generally within a month after the
record date, on which a firm mails dividend
checks to its registered stockholders

17-8
Figure 17.2 Important Dates for
Microsoft’s Special Dividend

17-9
Dividends (cont'd)
• Special Dividend
– A one-time dividend payment a firm makes,
which is usually much larger than a regular
dividend
• Stock Split (Stock Dividend)

– When a company issues a dividend in shares of
stock rather than cash to its shareholders

17-10
Figure 17.3 Dividend History
for GM Stock, 1983–2008

17-11
Dividends (cont'd)
• Return of Capital
– When a firm, instead of paying dividends out of
current earnings (or accumulated retained
earnings), pays dividends from other sources,
such as paid-in-capital or the liquidation of
assets
• Liquidating Dividend
– A return of capital to shareholders from a
business operation that is being terminated

17-12
Share Repurchases
• An alternative way to pay cash to investors

is through a share repurchase or buyback.
– The firm uses cash to buy shares of its own
outstanding stock.

17-13
Share Repurchases (cont'd)
• Open Market Repurchase

– When a firm repurchases shares by buying
shares in the open market
– Open market share repurchases represent
about 95% of all repurchase transactions.

17-14
• Tender Offer
– A public announcement of an offer to all
existing security holders to buy back a
specified amount of outstanding securities at
a prespecified price (typically set at a 10%-
20% premium to the current market price)
over a prespecified period of time (usually
about 20 days)
– If shareholders do not tender enough shares,
the firm may cancel the offer and no buyback
occurs.

17-15
• Dutch Auction
– A share repurchase method in which the firm
lists different prices at which it is prepared to
buy shares, and shareholders in turn indicate
how many shares they are willing to sell at
each price. The firm then pays the lowest price
at which it can buy back its desired number of
shares

17-16
• Targeted Repurchase
– When a firm purchases shares directly from a
specific shareholder
• Greenmail
– When a firm avoids a threat of takeover and
removal of its management by a major
shareholder by buying out the shareholder,
often at a large premium over the current
market price

17-17
17.2 Comparison of Dividends
and Share Repurchases
• Consider Genron Corporation. The firm’s
board is meeting to decide how to pay out
$20 million in excess cash to shareholders.
• Genron has no debt, its equity cost of
capital equals its unlevered cost of capital
of 12%.

17-18
Alternative Policy 1: Pay Dividend
with Excess Cash
• With 10 million shares outstanding,
Genron will be able to pay a $2 dividend
immediately.
• The firm expects to generate future free
cash flows of $48 million per year, thus it
anticipates paying a dividend of $4.80 per
share each year thereafter.

17-19
Alternative Policy 1: Pay Dividend with
Excess Cash (cont'd)
• Cum-dividend
– When a stock trades before the ex-dividend
date, entitling anyone who buys the stock to
the dividend
• The cum-dividend price of Genron will be

4.80
Pcum  Current Dividend  PV (Future Dividends)  2   2  40  $42
0.12

17-20
• After the ex-dividend date, new buyers will

not receive the current dividend and the
share price and the price of Genron will be
4.80
Pex  PV (Future Dividends)   $40
0.12

17-21

17-22
• In a perfect capital market, when a

dividend is paid, the share price drops by
the amount of the dividend when the stock
begins to trade ex-dividend.

17-23
Alternative Policy 2: Share
Repurchase (No Dividend)
• Suppose that instead of paying a dividend
this year, Genron uses the $20 million to
repurchase its shares on the open market.
– With an initial share price of $42, Genron will
repurchase 476,000 shares.
• $20 million ÷ $42 per share = 0.476 million shares
– This will leave only 9.524 million shares

outstanding.
• 10 million − 0.476 million = 9.524 million

17-24
Alternative Policy 2: Share Repurchase
(No Dividend) (cont'd)
• The net effect is that the share price

remains unchanged.

17-25
• Genron’s Future Dividends

– It should not be surprising that the repurchase
had not effect on the stock price.
– After the repurchase, the future dividend would
rise to $5.04 per share.
• $48 million ÷ 9.524 million shares = $5.04 per share
• Genron’s share price is
5.04
Prep   $42
0.12

17-26
• Genron’s Future Dividends

– In perfect capital markets, an open market
share repurchase has no effect on the stock
price, and the stock price is the same as the
cum-dividend price if a dividend were paid
instead.

17-27
• Investor Preferences
– In perfect capital markets, investors are
indifferent between the firm distributing funds
via dividends or share repurchases. By
reinvesting dividends or selling shares, they
can replicate either payout method on
their own.

17-28
• Investor Preferences
– In the case of Genron, if the firm repurchases
shares and the investor wants cash, the
investor can raise cash by selling shares.
• This is called a homemade dividend.
– If the firm pays a dividend and the investor

would prefer stock, they can use the dividend
to purchase additional shares.

17-29
Textbook Example 17.1

17-30
Textbook Example 17.1 (cont'd)

17-31
Alternative Policy 3:
High Dividend (Equity Issue)
• Suppose Genron wants to pay dividend
larger than $2 per share right now, but it
only has $20 million in cash today.
– Thus, Genron needs an additional $28 million
to pay the larger dividend now. To do this, the
firm decides to raise the cash by selling new
shares.

17-32
Alternative Policy 3: High Dividend
(Equity Issue) (cont'd)
• Given a current share price of $42, Genron

could raise $28 million by selling 0.67
million shares.
– $28 million ÷ $42 per share = 0.67 million
shares
• This will increase the total number of shares to
10.67 million.

17-33
Alternative Policy 3: High Dividend
(Equity Issue) (cont'd)
• The new dividend per share will be

$48 million
 $4.50 per share
10.67 million shares
• And the cum-dividend share price will be

4.50
Pcum  4.50   4.50  37.50  $42
0.12
• Again, the share value is unchanged.

17-34
Modigliani–Miller
and Dividend Policy Irrelevance
• There is a trade-off between current and
future dividends.
– If Genron pays a higher current dividend,
future dividends will be lower.
– If Genron pays a lower current dividend, future
dividends will be higher.

17-35
Table 17.1 Genron’s Dividends per Share
Each Year Under the Three Alternative Policies

17-36
Modigliani–Miller and Dividend
Policy Irrelevance (cont'd)
• MM Dividend Irrelevance
– In perfect capital markets, holding fixed the
investment policy of a firm, the firm’s choice of
dividend policy is irrelevant and does not affect
the initial share price.

17-37
Dividend Policy
with Perfect Capital Markets
• A firm’s free cash flow determines the level
of payouts that it can make to its
investors.
– In a perfect capital market, the type of payout
is irrelevant.
– In reality, capital markets are not perfect and it
is these imperfections that should determine
the firm’s payout policy.

17-38
17.3 The Tax Disadvantage of
Dividends
• Taxes on Dividends and Capital Gains
– Shareholders must pay taxes on the dividends
they receive and they must also pay capital
gains taxes when they sell their shares.
– Dividends are typically taxed at a higher rate
than capital gains. In fact, long-term investors
can defer the capital gains tax forever by not
selling.

17-39
Table 17.2 Long-Term Capital Gains Versus
Dividend Tax Rates in the United States,
1971–2009

17-40
17.3 The Tax Disadvantage
of Dividends (cont'd)
• Taxes on Dividends and Capital Gains
– The higher tax rate on dividends makes it
undesirable for a firm to raise funds to pay a
dividend.
• When dividends are taxed at a higher rate than
capital gains, if a firm raises money by issuing shares
and then gives that money back to shareholders as a
dividend, shareholders are hurt because they will
receive less than their initial investment.

17-41

17-42

17-43
Alternative Example 17.2
• Problem
– Assume:
• A firm raises $25 million from shareholders and uses
this cash to pay them $25 million in dividends.
• Dividends are taxed at a 39% tax rate
• Capital gains are taxed at a 20% tax rate.
– How much will shareholders receive after

taxes?

17-44
• Solution
– On dividends, shareholders will owe:
• 39% × $25 million = $9.75 million in dividend taxes.
– Shareholders will lower their capital gains taxes

by:
• 20% × $25 million = $5 million
– Note: The value of the firm will fall when the dividend is
paid, lowering the shareholders’ capital gains.

17-45
• Solution (continued)
– Shareholders will pay a total of $4.75 million in
taxes.
• $9.75 − $5.00 = $4.75 million
– Shareholders will receive back only $20.25

million of their $25 million investment.
• $25 − $4.75 = $20.25 million

17-46
Optimal Dividend Policy with Taxes
• When the tax rate on dividends is greater

than the tax rate on capital gains,
shareholders will pay lower taxes if a firm
uses share repurchases rather than
dividends.
– This tax savings will increase the value of a
firm that uses share repurchases rather than
dividends.

17-47
Optimal Dividend Policy
with Taxes (cont'd)
• The optimal dividend policy when the
dividend tax rate exceeds the capital gain
tax rate is to pay no dividends at all.
– The payment of dividends has declined on
average over the last 30 years while the use of
repurchases has increased.

17-48
Figure 17.4 The Decline in Payouts and
the Use of Dividends
Source: Compustat.
17-49
Figure 17.5 The Changing Composition
of Shareholder Payouts
Source: Compustat data for U.S. firms, excluding financial firms and utilities.
17-50
Optimal Dividend Policy
with Taxes (cont'd)
• Dividend Puzzle
– When firms continue to issue dividends despite
their tax disadvantage

17-51
17.4 Dividend Capture and Tax
Clienteles
• The preference for share repurchases
rather than dividends depends on the
difference between the dividend tax rate
and the capital gains tax rate.
– Tax rates vary by income, by jurisdiction, and
by whether the stock is held in a retirement
account.
– Given these differences, firms may attract
different groups of investors depending on their
dividend policy.

17-52
The Effective Dividend Tax Rate
• Consider buying a stock just before it goes ex-

dividend and selling the stock just after.
– The equilibrium condition must be:
(Pcum  Pex ) (1   g )  Div(1   d )

• Which can be stated as
1  d   d  g 
Pcum  Pex  Div  
 1   
 Div  1 
 1  g

  Div  1   d
*

 g   
– Where Pcum is the cum-dividend price, Pex is the ex-dividend
price, g is the capital gains rate tax, d is the dividend tax rate.

17-53
The Effective Dividend Tax Rate
(cont'd)
• Thus, the effective dividend tax rate is
d  g 
 *
  
d 1  
 g 
– This measures the additional tax paid by the
investor per dollar of after-tax capital gains
income that is instead received as a dividend.

17-54

17-55

17-56
Tax Differences Across Investors
• The effective dividend tax rate differs

across investors for a variety of reasons.
– Income Level
– Investment Horizon
– Tax Jurisdiction
– Type of Investor or Investment Account
• As a result of their different tax rates

investors will have varying preferences
regarding dividends.

17-57
Clientele Effects
• Clientele Effect
– When the dividend policy of a firm reflects the
tax preference of its investor clientele
• Individuals in the highest tax brackets have a
preference for stocks that pay no or low dividends,
whereas tax-free investors and corporations have a
preference for stocks with high dividends.

17-58
Table 17.3 Differing Dividend Policy
Preferences Across Investor Groups

17-59
Clientele Effects (cont'd)
• Dividend-Capture Theory
– The theory that absent transaction costs,
investors can trade shares at the time of the
dividend so that non-taxed investors receive
the dividend
• An implication of this theory is that we should see
large trading volume in a stock around the ex-
dividend day, as high-tax investors sell and low-tax
investors buy the stock in anticipation of the dividend,
and then reverse those trades just after the ex-
dividend date.

17-60
Figure 17.6 Volume and Share Price
Effects of Value Line’s Special Dividend

17-61
17.5 Payout Versus Retention of
Cash
• In perfect capital markets, once a firm has
taken all positive-NPV investments, it is
indifferent between saving excess cash
and paying it out.
• With market imperfections, there is a
tradeoff: Retaining cash can reduce the
costs of raising capital in the future, but it
can also increase taxes and agency costs.

17-62
Retaining Cash
with Perfect Capital Markets
• If a firm has already taken all positive-NPV
projects, any additional projects it takes
on are zero or negative-NPV investments.
– Rather than waste excess cash on negative-
NPV projects, a firm can use the cash to
purchase financial assets.
– In perfect capital markets, buying and selling
securities is a zero-NPV transaction, so it
should not affect firm value.

17-63
Retaining Cash with Perfect Capital
Markets (cont'd)
• Thus, with perfect capital markets, the retention

versus payout decision is irrelevant.

17-64

17-65

17-66
• Problem
– Payne Enterprises has $20,000,000 in excess
cash.
– Payne is considering investing the cash in one-
year Treasury bills paying 5% interest, and
then using the cash to pay a dividend next
year.

17-67
• Problem (continued)
– Alternatively, the firm can pay a dividend
immediately and shareholders can invest the
cash on their own.
– In a perfect capital market, which option
will shareholders prefer?

17-68
• Solution
– If Payne pays an immediate dividend, the
shareholders receive $20,000,000 today.
– If Payne retains the cash, at the end of one
year the company will be able to pay a
dividend of $21,000,000.
• $20,000,000 × (1.05) = $21,000,000

17-69
• Solution (continued)
– If shareholders invest the $20,000,000 in
Treasury bills themselves, they would have
$21,000,000 at the end of 1 year.
• $20,000,000 × (1.05) = $21,000,000
– The present value in either scenario is:

• $21,000,000 ÷ 1.05 = $20,000,000
– Thus shareholders are indifferent about

whether the firm pays the dividend
immediately or retains the cash.

17-70
Retaining Cash with Perfect Capital
Markets (cont'd)
• MM Payout Irrelevance
– In perfect capital markets, if a firm invests excess cash
flows in financial securities, the firm’s choice of payout
versus retention is irrelevant and does not affect the
initial share price.

17-71
Taxes and Cash Retention
• Corporate taxes make it costly for a firm to

retain excess cash.
– Cash is equivalent to negative leverage, so the
tax advantage of leverage implies a tax
disadvantage to holding cash.

17-72

17-73

17-74
• Problem
– What if Payne, from Alternative Example 17.4,
has a marginal tax rate of 39%. Would a tax-
exempt endowment prefer that Payne use its
excess cash to pay the dividend immediately or
invest the cash in a Treasury bill paying 5%
interest and then pay out a dividend?

17-75
Alternative Example 17.5 (cont’d)
• Solution
– If Payne pays a dividend today, shareholders
receive $20,000,000. If Payne retains the cash
for one year, it will earn an after-tax return on
the Treasury bills of:
5% × (1 − 0.39) = 3.05%
– At the end of the year, Payne will pay a
dividend of $20,000,000 × (1.0305) =
$20,610,000. This amount is less than the
$21,000,000 the endowment would have
earned if they had invested the $20,000,000 in
the Treasury bills themselves.
17-76

17-77

17-78
• Problem
– What if Payne, from Alternative Examples 17.4
and 17.5, were to pay a special dividend of
$20,000,000. How would this affect the
present value of the taxes Payne must pay?

17-79
Alternative Example 17.6 (cont’d)
• Solution
– If Payne retains the $20,000,000 and invests in
Treasury Bills, the interest will be taxed at
39%. The present value of the tax payments
on Payne’s additional interest income will be:
$20, 000, 000  5%  39%
 $7,800, 000
5%

17-80
Adjusting for Investor Taxes
• The decision to pay out versus retain cash

may also affect the taxes paid by
shareholders.
– When a firm retains cash, it must pay
corporate tax on the interest it earns. In
addition, the investor will owe capital gains tax
on the increased value of the firm. In essence,
the interest on retained cash is taxed twice.

17-81
Adjusting for Investor Taxes
(cont'd)
– If the firm paid the cash to its shareholders
instead, they could invest it and be taxed only
once on the interest that they earn.
• The cost of retaining cash therefore depends on the
combined effect of the corporate and capital gains
taxes, compared to the single tax on interest income.
 1   c  1   g  
 retain
*
 1  
 1   i  

17-82
Issuance and Distress Costs
• Generally, firms retain cash balances to

cover potential future cash shortfalls,
despite the tax disadvantage to retaining
cash.
– A firm might accumulate a large cash balance if
there is a reasonable chance that future
earnings will be insufficient to fund future
positive-NPV investment opportunities.

17-83
Issuance and Distress Costs (cont'd)
• The cost of holding cash to cover future

potential cash needs should be compared
to the reduction in transaction, agency,
and adverse selection costs of raising new
capital through new debt or equity issues.

17-84
Agency Costs of Retaining Cash
• When firms have excessive cash,

managers may use the funds inefficiently
by paying excessive executive perks, over-
paying for acquisitions, etc.
– Paying out excess cash through dividends or
share repurchases, rather than retaining cash,
can boost the stock price by reducing
managers’ ability and temptation to waste
resources.

17-85

17-86

17-87
Agency Costs of Retaining Cash
(cont'd)
• Firms should choose to retain to help with
future growth opportunities and to avoid
financial distress costs.
– It is not surprising that high-tech and
biotechnology firms tend to retain and
accumulate large amounts of cash.

17-88
Table 17.4 Firms with Large Cash
Balances (April 2009)

17-89
• Dividend Smoothing
– The practice of maintaining relatively constant
dividends
• Firm change dividends infrequently and dividends are
much less volatile than earnings.

17-90
Figure 17.7 GM’s Earnings and
Dividends per Share, 1985–2008
Source: Compustat and CapitalIQ.

17-91
(cont'd)
• Research has found that
– Management believes that investors prefer
stable dividends with sustained growth.
– Management desires to maintain a long-term
target level of dividends as a fraction of
earnings.
• Thus, firms raise their dividends only when they
perceive a long-term sustainable increase in the
expected level of future earnings, and cut them only
as a last resort.

17-92
Dividend Signaling
• Dividend Signaling Hypothesis

– The idea that dividend changes reflect
managers’ views about a firm’s future earning
prospects
• If firms smooth dividends, the firm’s dividend choice
will contain information regarding management’s
expectations of future earnings.

17-93
Dividend Signaling (cont'd)
• When a firm increases its dividend, it

sends a positive signal to investors that
management expects to be able to afford
the higher dividend for the foreseeable
future.
• When a firm decreases its dividend, it may
signal that management has given up
hope that earnings will rebound in the near
term and so need to reduce the dividend
to save cash.

17-94
Dividend Signaling (cont'd)
• While an increase of a firm’s dividend may

signal management’s optimism regarding
its future cash flows, it might also signal a
lack of investment opportunities.
• Conversely, a firm might cut its dividend to
exploit new positive-NPV investment
opportunities.
– In this case, the dividend decrease might lead
to a positive, rather than negative, stock price
reaction.

17-95
Signaling and Share Repurchases
• Share repurchases are a credible signal that

the shares are under-priced, because if they
are over-priced a share repurchase is costly
for current shareholders.
– If investors believe that managers have better
information regarding the firm’s prospects and act
on behalf of current shareholders, then investors will
react favorably to share repurchase announcements.

17-96

17-97

17-98
17.7 Stock Dividends, Splits, and
Spin-offs
• Stock Dividends and Splits
– With a stock dividend, a firm does not pay out
any cash to shareholders.
• As a result, the total market value of the firm’s equity
is unchanged. The only thing that is different is the
number of shares outstanding.
– The stock price will therefore fall because the same
total equity value is now divided over a larger number
of shares.

17-99
17.7 Stock Dividends, Splits,
and Spin-offs (cont'd)
– Suppose Genron paid a 50% stock dividend (a
3:2 stock split) rather than a cash dividend.
• A shareholder who owns 100 shares before the
dividend has a portfolio worth $4,200.
– $42 × 100 = $4,200.
• After the dividend, the shareholder owns 150 shares.
Since the portfolio is still worth $4,200, the stock
price will fall to $28.
– $4,200 ÷ 150 = $28

17-100
Table 17.5 Cum- and Ex-Dividend Share
Price for Genron with a 50% Stock Dividend ($
million)

17-101
– Stock dividends are not taxed, so from both
the firm’s and shareholders’ perspectives, there
is no real consequence to a stock dividend.
• The number of shares is proportionally increased and
the price per share is proportionally reduced so that
there is no change in value.

17-102
– The typical motivation for a stock split is to
keep the share price in a range thought to be
attractive to small investors.
– If the share price rises “too high,” it might be
difficult for small investors to invest in the
stock.

17-103
– Keeping the price “low” may make the stock
more attractive to small investors and can
increase the demand for and the liquidity of the
stock, which may in turn boost the stock price.
• On average, announcements of stock splits are
associated with a 2% increase in the stock price.

17-104
– Reverse Split
• When the price of a company’s stock falls too low and
the company reduces the number of outstanding
shares

17-105
Figure 17.8 Distribution of Stock Prices
for NYSE Firms (June 2009)

17-106
Spin-offs
• Spin-off
– When a firm sells a subsidiary by selling shares
in the subsidiary alone
• Non-cash special dividends are commonly used to
spin off assets or a subsidiary as a separate company.

17-107
Spin-offs (cont'd)
• Spin-offs offer two advantages

– It avoids the transaction costs associated with
a subsidiary sale.
– The special dividend is not taxed as a cash
distribution.

17-108
Discussion of Data Case Key Topic
• If Congress were to pass legislation

eliminating the capital gains tax, what
would be the impact on your analysis?
What if taxes on dividends were eliminated
instead?
• How would your analysis change if capital
gains and dividends were both taxed at
the same rate as ordinary income?

17-109
Chapter Quiz
1. What is a targeted repurchase?

2. How important is the firm’s decision to pay
dividends versus repurchase shares, assuming
perfect capital markets?
3. What is “the dividend puzzle”?
4. Why would investors have a tax preference for
share repurchases rather than dividends?
5. Is there an advantage for a firm to retain its
cash instead of paying it out to shareholders in
perfect capital markets? What if capital markets
are not perfect?

17-110
Chapter Quiz
6. What possible signals does a firm give

when it cuts its dividend?
7. What is the difference between a stock
dividend and a stock split?
8. Why would a firm initiate a reverse stock
split?

17-111

CH 17 Payout Policy

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Chapter 17

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17.1 Distributions to Shareholders

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1. List two ways a company can distribute

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5. Assuming perfect capital markets, describe

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• Payable Date (Distribution Date)

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• Stock Split (Stock Dividend)

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• An alternative way to pay cash to investors

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• Open Market Repurchase

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Copyright © 2011 Pearson Prentice Hall. All rights reserved.

Copyright © 2011 Pearson Prentice Hall. All rights reserved.

Copyright © 2011 Pearson Prentice Hall. All rights reserved.

Copyright © 2011 Pearson Prentice Hall. All rights reserved.

• The cum-dividend price of Genron will be

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• After the ex-dividend date, new buyers will

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• In a perfect capital market, when a

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– This will leave only 9.524 million shares

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• The net effect is that the share price

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• Genron’s Future Dividends

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• Genron’s Future Dividends

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– If the firm pays a dividend and the investor

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• Given a current share price of $42, Genron

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• The new dividend per share will be

• And the cum-dividend share price will be

• Again, the share value is unchanged.

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Copyright © 2011 Pearson Prentice Hall. All rights reserved.

Copyright © 2011 Pearson Prentice Hall. All rights reserved.

Copyright © 2011 Pearson Prentice Hall. All rights reserved.

Copyright © 2011 Pearson Prentice Hall. All rights reserved.

Copyright © 2011 Pearson Prentice Hall. All rights reserved.