What was the primary motivation for Apple (and others) to undertake a stock split?To raise more cash for the company through increasing the number of shares on the marketTo make the price of their shares seem more affordable to investorsTo decrease their number of share outstanding in order to increase EPSO To raise more cash for the company through a stock issuanceQuestion 11What could be a major motivation for Walmart (and others) to undertake a share repurchase?O To purchase cheaper shares today and reissue later at a higher priceTo make their shares seem more affordable to investorsBecause they have no other options to use their cashO To get additional cash today in order to invest in other projects

"Since you have asked multiple question, we will solve the first question for you. If you want any…

What was the primary motivation for Apple (and others) to undertake a stock split? O To raise more cash for the company through increasing the number of shares on the market O To make the price of their shares seem more affordable to investors O To decrease their number of share outstanding in order to increase EPS To raise more cash for the company through a stock issuance

What was the primary motivation for Apple (and others) to undertake a stock split? O To raise more cash for the company through increasing the number of shares on the market O To make the price of their shares seem more affordable to investors O To decrease their number of share outstanding in order to increase EPS To raise more cash for the company through a stock issuance

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

A company might purchase treasury stock for all of the following reasons excepta. it wants to increase its net assets by buying its stock low and reselling it at a higher price.b. management wants to decrease the earnings per share of common stock.c. management wants to avoid a takeover by an outside party.d. the company needs the stock to distribute to employees as part of its employee stockpurchase plans.
. On the day an IPO comes out, the market pricecan rise above the offering price or fall below thatprice. Is it more common for the market price toclose above or below the offering price on the dayof an IPO? If a company’s market price rises abovethe IPO price, does that suggest that the companyleft money on the table and thus received less for its shares than it should have received? If mostcompanies do leave money on the table, does thatindicate the IPO market is inefficient? How mightsystematic underpricing be explained? Has theamount of underpricing been constant over time?Explain.
Shares repurchase and the previous problem? Suppose the company had. Announce is going to repurchase $21,850 worth of stock instead of repairing a dividend. What effects would the transaction have on the equity of the firm? How many shares will be outstanding? What will the price per share before the repurchase? Ignoring tax effects, shows how the share repurchase is affectively the same as a cash dividend.
Why might a stock dividend or a stock split be of limited value to an investor? What about a stock repurchase? Companies have been spending trillions of dollars to repurchase their own shares in recent years. Why do they do so? Does it make sense for a corporation to repurchase its own stock? Explain.
The cost of preferred stock Firms that carry preferred stock in their capital structure want to not only distribute dividends to common stockholders but also maintain credibility in the capital markets so that they can raise additional funds in the future and avoid potential corporate raids from preferred stockholders. Consider the case of Blue Panda Ice Cream Company: Blue Panda has preferred stock that pays a dividend of $9.00 per share and sells for $100 per share. It is considering issuing new shares of preferred stock. These new shares incur an underwriting (or flotation) cost of 1.70%. How much will Blue Panda pay to the underwriter on a per-share basis? Pick the correct choice. $1.44 $88.47 $1.70 $98.30 After it pays its underwriter, how much will Blue Panda receive from each share of preferred stock that it issues? Pick the correct choice. $98.30 $1.44 $1.87 $88.47 $1.70 Based on this…
Presently, your company’s Face Value of Equity Share RO 10 and Market Value of your Share in MSM is RO 25 per share. In order to increase the trading volume and market liquidity of your company stock, will you suggest the management to go for stock split? Explain your management about concept of stock slip with the advantage of splitting the stock of your company with the current scenario.
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?
A. Write out the equation of corporate value model, and why there is a need of corporate value model for valuing stocks, when you can easily use the dividend model? B. Being a stock holder of Ghani Glass limited, a very well-known company listed in the Karachi Stock Exchange 100 index, you are keen to fairly determine the value of stock. Given the following information, what is Ghani Glass Limited value per share? The free cash flow of the company is expected to be negative -3 Million (Rs. 3,000,000) for first year, 6 Million (Rs. 6,000,000) for second year, 12 Million (Rs. 12,000,000) for third year, and 20 Million (Rs. 12,000,000) for the fourth year. The long-term growth after year 4 is expected to be 3%, and the rate of return is 8%. The company has Rs. 50 Million in the debt and at present there are 5 Million shares of the company Need full solution otherwise I will report
Which of the following statements is true? Group of answer choices a. Dividend payments are attractive to executives who hold many executive stock options that were awarded to them by their firms b.Executives and other insiders benefit most by being able to tender their shares in an open market repurchase since they usually are privy to information that is not available to the general public c.Empirical research suggests that small, retail investors prefer stock repurchases to dividend payments d. a firm does not pay dividends, some institutional investors are prohibited from investing it the firmʹs equity
1. Discuss the implication of share Buybacks and Stock Options on the value of a company? 2. Discuss what recommendations you would have for a company like Bed, Bath, & Beyond, who spent 100's of millions of dollars on Share buybacks, which resulted them going bankrupt.
N1 Assuming Kingsla Motors was on the stock exchange, why might it contemplate a share split if its sharer price grew substantially? Should doing a share split alter the total value of company (known as market capitalisation)?
Bluesky.com, which currently is a privately held corporation, is making plans for future growth. The company’s financial manager has recommended that Bluesky“go public” by issuing common stock to raise the funds needed to support thegrowth. The current owners, who are the founders of the company, are concernedthat control of the firm will be diluted by this strategy. If Bluesky undertakes anIPO, it is estimated that each share of stock will sell for $5, the investment bankingfee will be 15 percent of the total value of the issue, and the costs to the companyfor items such as lawyer fees, printing stock certificates, SEC registration, and so onwill be approximately 1 percent of the total value of the issue.a. If the market value of the stock issue is $42 million, how much will Blueskybe able to use for growth?b. How many shares of stock will Bluesky have to issue if it needs to net$42 million for growth?c. The founders now hold all of the company’s stock—10 million shares. If thecompany…

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS