Core problem:

The main issue of the case is the recommendations of regular dividends/special dividends/share
repurchase with their corresponding pros and cons

Subject to:

Sufficient cash has been retained for the merger and acquisitions and Capital expenditure.

Possible solution:

 Three scenarios for regular dividends/special dividends/share repurchase

Things that needs to be considered:

 Revenue has to be forecasted for Newspapers, book publishing and supplementary

education separately.
 The estimated spending on merger and acquisitions and capex will be same under each
scenario. After the required money has been separated, the excess will be used for
payout/repurchase.
 The Debt/asset ratio is just 18% where the appropriate ratio is 30% with an extension to
50% is possible. This means borrowing should be used for financing capex/merger and
acquisition. Otherwise, cash available for dividend/repurchase will be low.
 Acquisitions will need to be made within 3 years. While 15 companies have been targeted,
half of them is expected to be acquired costing 150 million.
 The exercise of stock options should be incorporated.