What would you have to do to increase the value of your Company's stock without distributing dividends for years? actions for increasing stock value if you continuosly do not pay out dividends (would you identify big known firms examples ?
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Ab. 127.
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- d. (1) What are the two primary ways companies raise common equity? (2) Why is there a cost associated with reinvested earnings? (3) Jana doesnt plan to issue new shares of common stock. Using the CAPM approach, what is Janas estimated cost of equity?Do all companies pay dividends? What is another way stockholders can get a return on their investment? Did Microsoft always pay dividends, and if not why would they start?Is this statement true or false? Give a reason for your answer. "A company can always increase its stock price by increasing its dividend payout ratio."
- Your company has been very profitable and expects continued financial success. Its stock price has reached a pointwhere the company needs to make it more affordable. Wouldyou recommend a stock dividend or a stock split? Why?What does it mean when a company has zero net income but its stock price has increased? How do you recognize the change under the equity method?A firm is planning to borrow money to make an equity repurchase to increase its stock price. It is basing its analysis on the fact that there will be fewer shares outstanding after the repurchases, and higher earnings per share. There are no taxes. a. Will earnings per share always increase after such an action? Explain.b. Will the higher earnings per share always translate into a higher stock price? Explain.c. Under what conditions will such a transaction lead to a higher price?
- Why might a company repurchase its own stock? A) It believes that the market undervalues its shares B) To offset dilutive effects of employee stock options granted C) To recognize an economic gain when the treasury shares are later sold for a profit D) To improve earnings per share by reducing the denominator E) All of the above is it just A and B or is it all of the aboveIs this statement true or false? Give a reason for your answer. "An increase in a firm's inclination to pay dividends may be because of a decline in profitable investment opportunities in the future."What can you expect to be different on the announcement date AND after the ex-dividend date when a stock price of a certain company drops after it declares dividends?
- which one is correct please confirm? QUESTION 2 In the theoretical world of Miller and Modigliani, ____. a. a firm should pay out 100% of earnings as dividends to maximize shareholder wealth b. dividends are important only for their informational content c. dividends reduce investors’ uncertainty d. the marginal tax rates facing investors are the most important single determinant of dividend policyWhen a company participates in a stock buyback program, it means that the company is buying shares of its own stock and taking them off the market. With this simple definition in mind, how would a company's stock buyback program affect its Earnings per Share?A company issues stock dividends for several reasons: Select one: a. To reward investors b. To reduce the market price per share of its stock O c. All the options O d. To continue dividends but conserve cash