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DIA [1.3K]
3 years ago
6

Assume you are the CFO of a company that has accumulated a significant amount of cash, well beyond its foreseeable needs. The co

mpany’s CEO has asked your opinion about using the cash to repurchase company shares or using the cash to distribute an extraordinary dividend to your shareholders. In a brief memo, explain to the CEO what the pros and cons of each of these are. You may assume your company is a fictitious one and assign to it whatever circumstances you like or you may assume your company is an actual existing corporation. Your memo should include at least two references to published works like books, articles, etc.
Business
1 answer:
boyakko [2]3 years ago
4 0

Answer:

I believe that the best action is to repurchase stocks.

Paying a large and unexpected dividend will yield an immediate return, but it will also decrease the stock's price. On the other hand, repurchasing stocks will result in lower outstanding stocks and the same cash flows. This will result in higher stock prices. Supposedly, upper management has the duty to increase the wealth of stockholders and that is achieved through higher stock prices.

Explanation:

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If John made $23,562.55 in wages, and $2,679.32 cents in tips, what amount should he enter for his income when filling out his 1
Harrizon [31]

Answer:

Explanation:

$26,241.67

8 0
2 years ago
Read 2 more answers
Neuman Corporation Convertible Bonds The following data apply to Neuman Corporation's convertible bonds: Maturity: 10 Stock pric
Natalija [7]

Answer:

A. The bond’s conversion ratio is 28.57

B. The bond’s conversion value is $857.14

C. The bond’s straight debt value is $798.70

D. The minimum price at which Neuman’s bonds should sell is $857.14

Explanation:

A. In order to calculate the bond’s conversion ratio we would have to calculate the following formula:

bond’s conversion ratio=par value/conversion price

According to the given data:

par value=$1,000

Conversion price=$35

Therefore, bond’s conversion ratio=$1,000/$35

bond’s conversion ratio=28.57

B. To calculate the bond’s conversion value we would have to make the following calculation:

bond’s conversion value=bond’s conversion ratio*Stock price

bond’s conversion value=28.57*$30.00

bond’s conversion value=$857.14

C. To calculate the bond’s straight debt value we would have to calculate the following formula:

bond’s straight debt value=PV(0.08,10,50,1,000)

bond’s straight debt value=$798.70

D. The minimum price at which Neuman’s bonds should sell is $857.14

7 0
3 years ago
n​ mid-2017, an article in the Wall Street Journal noted​ that: ​"The Federal​ Reserve's interest-rate increases​ aren't having
telo118 [61]

Answer:

No

Explanation:

When Congress enacted the Federal Reserve Act in 1913, they stated the FED's mandates:

  1. promote maximum employment
  2. promote stable price

The FED's main objective is to conduct monetary policy in order to stabilize the economy and promote economic growth.

By stabilizing the economy the FED will lower inflation rate, therefore stabilizing prices. When the FED promotes economic growth, the unemployment rate should decrease, hopefully reaching a full employment.

7 0
3 years ago
The more​ ________ used, the greater the leverage a company employs on behalf of its owners.
son4ous [18]

The more​ debt used, the greater the leverage a company employs on behalf of its owners.

<h3>What is financial leverage?</h3>

Financial leverage exists as the usage of borrowed money (debt) to finance the purchase of assets with the anticipation that the income or capital gain from the new asset will surpass the cost of borrowing.

<h3>What is financial leverage example?</h3>

An example of financial leverage use contains utilizing debt to buy a house, borrowing money from the bank to begin a store, and bonds issued by companies.

Debt exists as an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another group, the creditor. Debt stands for deferred payment, or sequence of payments, which distinguishes it from an immediate purchase.

To learn more about financial leverage refer to:

brainly.com/question/17099821

#SPJ4

8 0
1 year ago
A company uses the following standard costs to produce a single unit of output. Direct materials 7 pounds at $0.60 per pound = $
Naddika [18.5K]

Answer:

Direct material price variance= $20,100 unfavorable.

Explanation:

Giving the following information:

Direct materials 7 pounds at $0.60 per pound = $ 4.20

During the latest month, the company purchased and used 67,000 pounds of direct materials for $.90 per pound to produce 10,000 units of output.

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (0.60 - 0.90)*67,000= $20,100 unfavorable.

7 0
3 years ago
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