Why do companies often repurchase stock instead of paying cash dividends? What is the effect for the stockholder?

Q: Why might a stock dividend or a stock split be of limited value to an investor? Please explain your…

A: Stock dividend is dividend paying to investors in kind. It is adding value to the shares of the…

Q: How does the market react to unexpected dividend changes? What does this tell us about dividend…

A: Dividend: It refers to the surplus amount paid by the company to its shareholders. It is considered…

Q: Stockholders can transfer wealth from bondholders through a variety of actions. How would the…

A: An increase in dividends- Increase in dividend would reduce the value of the net assets of the…

Q: own stock that they have previously issued?’

A: company wants to repurchase some of its own stock that they have previously issued because of…

Q: he final distribution of cash to shareholders after a company has been sold off or discontinued…

A: At the time of liquidation of corporation, firstly all non cash assets are sold out, liabilities are…

Q: If stock dividends and stock splits don't give shareholders significant value/ amount, why do you…

A: Every publicly listed company has a defined amount of existing shares. A stock split is a measure…

Q: Companies sell common stock to raise long-term capital. What are the pros and cons of selling stock?…

A: Common Stock : Common stock is a type of security that represents ownership of equity in a company.…

Q: To what extent do you feel the company’s dividend policies support or hinder their strategies? For…

A: The main aim of any organization should be to increase shareholder value, however for any growth…

Q: If a company is thinking about distributing excesscash through a stock repurchase program in lieuof…

A: The company chooses to repurchase its shares in the following situation. To reduce outstanding share…

Q: How do cash dividends affect the realized rate of return from investing in shares of common stock

A: Cash dividends are distribution of profits earned by a company is cash. These are inflows for…

Q: Which dividends do not reduce stockholders' equity? O Cash dividends O Stock dividends O Property…

A: When Cash Dividends are Paid than they Reduces Retained Earning and Cash Balance of the Organization…

Q: How is treasury stock purchased? What ethical issues may arise from buying back company stock?

A: Treasury stock can be defined as the portion of equity which is not available for public to trade,…

Q: hy would a company choose to not pay dividends on its common stock?

A: Dividends are the return earned by the shareholders in lieu of the amount invested in company's…

Q: Why do companies reacquire their own shares of stock?

A: Ans. For many reasons companies reacquire their own shares of stock. Some of them are discussed…

Q: Exactly when does a corporation decide to pay out a cash dividend?

A: -CASH DIVIDEND:  Cash dividends are considered Assets because they increase the net worth of…

Q: Why do firms still do stock dividends and stock splits if it doesn't give shareholders much value…

A:

Q: Write out the equation of corporate value model, and why there is a need of corporate value model…

A: The calculation of theoretical value of stock is known as stock valuation. It is important tool to…

Q: Why do stock companies prefer equity financing in raising money for their operations than debt…

A: Equity financing refers to the process whereby a company raises the funds by issuing equity. The…

Q: Explain the concept of ‘buying back of shares by a company. What are the effects of such a buy-back?…

A: Shares are the units of the equity ownership of a corporation that is held by the shareholders of…

Q: What is treasury stock? Why would a company repurchase its own stock? How might they dispose of the…

A: Stockholders’ equity is the measure of assets staying in a business after the sum total of the…

Q: Topic: Payout Policy What are the drawback(s) of distributing dividends instead of retained…

A: The dividend policy is a decision in deciding the exchange between paying dividends and retaining…

Q: What are the company motives for declaring dividends or stock repurchase programs? 2. How would you…

A: Because you have asked multiple questions, we will solve the first question as per the policy of…

Q: Stock dividends are ________ costly to issue than cash dividends. What is the missing word?

A: Cash dividend is exposing company to double taxation. The cash dividend is taxable in the hands of…

Q: estion below. ) Which of the following is not a method to pay dividend to shareholders? Options O…

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

Q: If the company decides to declare a share dividend instead of cash, explain the effects on the…

A: A company declares share dividend instead of cash dividend if it has low or insufficient cash…

Q: /hen attempting to raise cash, a company may find it more advantageous to issue bonds rather an…

A: Solution Definition of Bonds Bonds payable are a form of long-term debt, which include a formal…

Q: One of the reasons why firms pay dividends is that dividends payments can be a signal to  the…

A: Dividend payments can be an indication that the firm is going to do well in the future. Firms that…

Q: A company might purchase treasury stock for all of the following reasons excepta. it wants to…

A:

Q: In case you retain huge amount of profit of your company for long term investment, what financial…

A: Given that the company retained a huge amount of profit for long term investment.

Q: There are various methods and techniques to pay dividend to shareholders. How can management use…

A: Methods or techniques to pay dividends to shareholders: Dividend payment through cash (either…

Q: Do common stockholders have guaranteed dividends?

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

Q: Explain two reasons for the firm management to prefer stock repurch

A: Stock repurchases :-  It means purchasing its own shares by the company. It is…

Q: When a firm is short of cash yet it wishes to distribute something to shareholders, it should…

A: The following are some of the types of Dividends Cash Dividend Stock Dividend Liquidating Dividend…

Q: Why do firms change their dividends policy?

A: Dividends are paid as a reward to the shareholders in lieu of the money given to the corporates for…

Q: Explain why the following statement is wrong (1 paragraph maximum): "The main reason why some…

A: Share repurchase is defined as transaction where the businesses purchases its own shares from the…