1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Katarina [22]
3 years ago
13

1. Why do firms choose to make large increases in their dividends or start a stock repurchase program?2. Why do firms choose to

cut or eliminate their dividends? What usually happens to the stock price of a company that does this?
Business
1 answer:
sergij07 [2.7K]3 years ago
8 0

Answer with Explanation:

Requirement 1:

The companies whose products are in growth phase or the company is cash cow which has a well diversified products does not have to invest in adding a new product line because their earnings are already stable enough or that they don't have to invest much because sufficient profits are left after extracting for investments. Increase in dividends has two meanings that either the management is confident enough that they think that the company will be able to earn more in the future and they will achieve better position in future which is a good news in the stock exchange and for investors as well and investor invest more in the company's ordinary stock.

Company start Stock repurchase program which is to buyback its previously issued ordinary shares which is because the management thinks that the stock is undervalued and thus they repurchase their ordinary shares so that the stock will go up in near future and this will benefit the company and the existing shareholders as well. This also helps in increasing earnings per share, return on equity, etc because the equity is reduced by share repurchase program.

Stock repurchase program is also run by the organization because they don't find any attractive opportunities. This means that the company does not have any large investment opportunities which means growth in revenue and profit can not be expected in the future years. Thus when the company starts repurchasing of stock the investor starts selling their stocks.

Requirement 2:

If the company thinks that they can increase the worth of shareholders beyond their shareholder's expectation then they don't pay dividend and invest in projects to increase the sales growth, profits and market share significantly in the coming future.

Some long term shareholders think this is a great news whereas short term investors who are looking for dividends will sell the stock which means that the stock value may fall in near future but in long run the company stock value increase when the investment will start showing its results.

You might be interested in
ABC company issued 3000 shares of stock for $5 per share and issued 5000 shares for land valued at $10,000. How much cash did AB
stellarik [79]

Answer:

The cash received by ABC company from the issuing of stock is $15,000.

Explanation:

It is given that ABC company issued 3000 shares of stock for $5 per share.

The cash received by ABC company from the issuing 3000 shares of stock is

Cash=3000\times \$5

Cash=\$15,000

It is also given that ABC company issued 5000 shares for land valued at $10,000. It means ABC company received land instead of cash. So, total cash received by ABC company from the issuing of stock is $15000

Therefore, the cash received by ABC company from the issuing of stock is $15,000.

8 0
2 years ago
13. A ground state hydrogen atom absorbs a photon of wavelength 94.98 nm and its electron attains a higher energy level. The ato
barxatty [35]

Answer:

wavelength of the second photon emitted is 97.26 nm

Explanation:

Data provided;

Wavelength absorbed = 94.98 nm

Wavelength of the one of the emitted photon = 4052.3 nm

Now,

The energy is given as:

Energy = \frac{\textup{hc}}{\lambda}

here,

h is the plank's constant

c is the speed of the light

λ is the wavelength

Now,

by the principle of conservation of energy

Initial energy = Final energy

Therefore,

\frac{\textup{hc}}{94.98} = \frac{\textup{hc}}{4052.3} + \frac{\textup{hc}}{\lambda_1}

or

\frac{\textup{hc}}{\lambda_1}= \frac{\textup{hc}}{94.98} -  \frac{\textup{hc}}{4052.3}

or

\frac{\textup{1}}{\lambda_1}= \frac{\textup{1}}{94.98} -  \frac{\textup{1}}{4052.3}

or

\frac{\textup{1}}{\lambda_1} = 0.0105 - 2.46 × 10⁻⁴

or

\frac{\textup{1}}{\lambda_1} = 0.01028

or

λ₁ = 97.26 nm

Hence,

the wavelength of the second photon emitted is 97.26 nm

6 0
3 years ago
Felicia paid $2,879 for a new wall oven with her credit card. Felicia’s credit card has an APR of 13. 89%, compounded monthly. I
xeze [42]

The answer is A

Explanation:

Answer is A trust me

7 0
2 years ago
50 POINTS AND BRAINLIEST
Vikentia [17]

Answer: sorry i took long

3. the time lost looking at both items

4. The cost of growing peppers, compared to the cost of growing tomatoes.

5.The net value to Kendra of going to Samuel's house to play games.

6. $150

9. The producers decide what should be produced.

10. Producers decide what should be produced.

11. property rights - producers can own or rent the building they manufacture in

12. A student learns to make web pages and starts making websites for local small businesses.

13. a personal computer or tablet used to access the internet

14. the decrease of pollution in the city

4 0
2 years ago
Suppose you're pitching in a softball game and facing a good hitter. you remember that you struck her out with a fastball the la
WARRIOR [948]
<span>When you make this decision, you are primarily using your critical thinking. You are using information you were given in the past and applying it to future events.</span>
8 0
2 years ago
Other questions:
  • In two to three sentences, explain how a tariff on cars can reduce the demand for imported cars.
    5·1 answer
  • On April 1, the price of gas at Bob’s Corner Station was $3.50 per gallon. On May 1, the price was $4.00 per gallon. On June 1,
    13·1 answer
  • Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-yea
    10·1 answer
  • Managers involved in negotiation should:
    12·1 answer
  • Gomez Company collected $19,200 on September 1, Year 1 from a customer for services to be provided over a one-year period beginn
    11·1 answer
  • There is a different​ short-run Phillips curve for every level of the​ ___________ inflation rate. The inflation rate at which t
    14·1 answer
  • A new client in the medical–surgical unit complains of difficulty sleeping and is scheduled for an exploratory laparotomy in the
    9·1 answer
  • Until recently you worked as an accountant earning $55,000 annually. Then you inherited a piece of commercial real estate bringi
    10·1 answer
  • List four differences between market price and seasonal product​
    12·1 answer
  • Azure inc. , an information technology company, uses a quartile strategy and positions itself in the third quartile to develop i
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!