Financial Accounting Blog

Saturday, November 15, 2003

This BusinessWeek article talks about Kodak's business strategy given the changing market of digital and their decision to cut stockholder dividends from $1.80 to 50 cents. We discussed in class that reducing dividends is often a sign to shareholders (or anyone for that matter) that a company may be struggling to effectively manage itself. This article presents Kodak's explanation in response to pointed questions on the issue posed by BusinessWeek editors.

"On Nov. 11, BusinessWeek editors met with Eastman Kodak CEO Daniel Carp and President Antonio Perez to discuss its prospects in a world in which digital imaging is rapidly replacing the film-based photography that made Kodak (EK ) an American icon. They also discussed shareholder reaction to their controversial Sept. 25 strategic plan, which cut Kodak's high dividend by 72% to help fund acquistions and invesments in digital-imaging technologies.