Financial policy, internal control, and performance Sealed Air Corporation's leveraged special dividend

This paper examines the role of financial policy as a catalyst for organizational change. The subject is Sealed Air Corporation, a company with substantial free cash flow that undertakes a leveraged special dividend. While the stock price response to announcement is typical, Sealed Air exhibits dramatic, sustained, post-dividend performance improvement. Evidence indicates this performance results from managers? conscious and successful use of financial leverage as a tool to disrupt the status quo and promote internal change, including establishing a new objective, changing compensation systems, and reorganizing manufacturing and capital budgeting processes.

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