Assume that you are an investor/shareholder, do you (personally) prefer dividend or stock repurchases? Why? Explain. (Re...
Assume that you are an investor/shareholder, do you (personally) prefer dividend or stock repurchases? Why? Explain. (Reply not required) - 18 points
Homework Answers
In general, companies give away the benefits to the shareholders by announcing dividends or buying back the shares from investors at a favorable rate. Personally one may highly prefer Stock Repurchase over the dividend, and the explanation is provided as below:
- Shareholders whoever don't sell off their shares will have an opportunity to see the increased EPS value as well as profitability in case of the Share Repurchase occurred.
- Shareholders need not worry about cash flow problems in case of the Share Repurchase occurred.
- Shareholders can benefit from lower capital gains rate rather than paying the tax over ordinary income tax charged on dividends.
- Share price will be increased benefiting the investor's portfolio.
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Assume that you are an investor/shareholder, do you (personally) prefer dividend or stock repurchases? Why? Explain. (Re...
Assume that you are an investor/shareholder, do you (personally) prefer dividend or stock repurchases? Why? Explain.
Assume that you are an investor/shareholder, do you (personally) prefer dividend or stock repurchases? Why? Explain.
3 Cash Dividend or Stock Dividend Why would a person investor) prefer to collect cash dividend...
3 Cash Dividend or Stock Dividend Why would a person investor) prefer to collect cash dividend instead of stock dividend? Why would a person (investor) prefer stock dividend instead of cash dividend? Explain which you would prefer and why? And if you expect this to change in the future for any reason.
2. Stock Repurchases a. What does it mean for a firm to repurchase stock? b. What...
2. Stock Repurchases a. What does it mean for a firm to repurchase stock? b. What are some reasons a firm may choose to repurchase stock? c. Explain why investors might prefer a stock repurchase to a dividend payment.
There are various types of dividends; however, the two most common dividends have to do with either a cash dividend or a...
There are various types of dividends; however, the two most common dividends have to do with either a cash dividend or a stock dividend. With a cash dividend the shareholder receives cash, based on the number of shares that is owned. In a stock dividend the shareholder receives stock certificates, based on the number of shares owned. From the perspective of the stockholder, which dividend would do you think they would prefer and from the perspective of the company, which...
Explain why a firm might prefer a stock repurchase rather than an increase in the firm's...
Explain why a firm might prefer a stock repurchase rather than an increase in the firm's regular dividend.
"Mutual Funds" Please respond to the following: Justify why a small investor would prefer a stock...
"Mutual Funds" Please respond to the following: Justify why a small investor would prefer a stock exchange market such as the New York Stock Exchange (NYSE), as compared to the National Association of Securities Dealers Automated Quotations (NASDAQ). Provide support for your justification. Take a position on the benefits and risks of a balanced fund versus a fixed index fund, indicating if a financial manager is most likely to invest in a balanced fund or a fixed index fund. Support...
Question 3 Explain the concept of dividend policy with an example. Discuss the dividend irrelevance theory...
Question 3 Explain the concept of dividend policy with an example. Discuss the dividend irrelevance theory with underlying assumptions by Modigliani and Miller. Your parents prefer high dividend paying stocks, while you prefer no-dividend stocks – explain the possible reasons for the differences in choice. Explain the following concepts with an example; Signaling hypothesis Clientele effects Catering theory You are the CEO of “I am the top 1%” Corporation, which has a capital structure of 60% equity and 40% debt....
a. Under what circumstances would you (as an investor) prefer to receive cash dividends rather than...
a. Under what circumstances would you (as an investor) prefer to receive cash dividends rather than stock dividends? If the company can reinvest its retained earnings at a higher ROI than I could earn on the money paid to me in dividends, I would prefer that the company pay a cash dividend. If I needed current income from my investment, I would want Cash dividends. b. Under what circumstances would you prefer stock dividends to cash dividends? If I needed...
As a corporate shareholder, would you be concerned if the firm distributed stock dividends for 3...
As a corporate shareholder, would you be concerned if the firm distributed stock dividends for 3 successive quarters instead of cash dividends ? Explain why or why not.
Based on all that you have learned, as an IT professional, explain why you would prefer...
Based on all that you have learned, as an IT professional, explain why you would prefer to be a project manager or as Business Analyst for an IT project? It the world of IT where the requirements can change daily if not hourly, how do you see the role changing in the next 3 years? Are you considering joining the iiBA? Why or why not? How about just the local chapter?
3 Cash Dividend or Stock Dividend Why would a person investor) prefer to collect cash dividend instead of stock dividend? Why would a person (investor) prefer stock dividend instead of cash dividend? Explain which you would prefer and why? And if you expect this to change in the future for any reason.
2. Stock Repurchases a. What does it mean for a firm to repurchase stock? b. What are some reasons a firm may choose to repurchase stock? c. Explain why investors might prefer a stock repurchase to a dividend payment.
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