Strategy
Designing Spotify's Post-Profitability Payout Policy
Overview
What this challenge is about.
Build a 3-year forecast of Spotify's free cash flow to equity and surplus cash position under base and downside cases. Benchmark payout ratios, buyback yields, and net leverage of Netflix, Meta, and Warner Music as comparators, and analyze how Spotify's dual-class structure (Daniel Ek/Martin Lorentzon control) affects optimal policy choice. Recommend a specific payout package — e.g., authorize a $1.5B buyback, initiate a token dividend, or hold cash for M&A — and defend it using clientele, signaling, and agency-cost arguments from the canonical literature. Success looks like a board-ready memo with a quantified policy and a clear narrative for sell-side analysts.
The Brief
What you'll do, and what you'll demonstrate.
What payout policy should Spotify adopt now that it generates sustained positive free cash flow, and how should it be communicated to the market?
Earning criteria — what you'll demonstrate
- Evaluate dividend vs. buyback trade-offs under signaling and tax-clientele theories
- Link payout policy to capital structure and corporate control considerations
- Forecast and stress-test free cash flow to equity for a mature growth firm
- Communicate financing policy decisions to capital markets audiences
Program Fit
Where this fits in your program.
Sharpens the same skills your degree expects you to demonstrate.
Skills
Skills you'll demonstrate.
Each one shows up on your verified credential.
Careers
Roles this prepares you for.
Real titles. Real skill bridges. Pick the one closest to your trajectory.
Career mappings coming soon.