Explain why stock buybacks are similar to dividends from

Assignment Help Finance Basics
Reference no: EM13480806

The purchase of treasury stock (commonly called stock buybacks) is being done with increasing frequency in lieu of dividend payments.

Required:

a. Explain why stock buybacks are similar to dividends from the company"s viewpoint.

b. Explain why managers might prefer the purchase of treasury shares to the payment of dividends.

c. Explain why investors might prefer that firms use excess cash to purchase treasury shares rather than pay dividends.

Reference no: EM13480806

Questions Cloud

Assume that you are nearing graduation and have applied for : assume that you are nearing graduation and have applied for a job with a local bank. the banks evaluation process
Examine the ways that health professionals can use the five : examine the ways that health professionals can use the five steps of evidence based practice as a practical framework
Explain how borman company should classify each of these : on january 1 borman company a lessee entered into three noncancellable leases for new equipment identified as lease j
How the organization of city space in moscow on the one : reading 1 caroline brooke. city of utopias and slums. this reading is on the attachment. please tutor i want essay
Explain why stock buybacks are similar to dividends from : the purchase of treasury stock commonly called stock buybacks is being done with increasing frequency in lieu of
The stock of carrolls bowling equipment currently pays a : the stock of carrolls bowling equipment currently pays a dividend d0 of 3. this dividend is expected to grow at an
Identify the basic rights inherent in ownership of common : capital stock is a major part of a corporations equity. the term capital stock embraces both common and preferred
Your supervisor wants you to explain to the class each step : you have been a federal narcotics agent with the u.s. drug enforcement agency dea for 5 years. your units arrest record
You expect inflation to be 3 per year for the next 20 years : assume you have 1 million now and you have just retired from your job. you expect to live for 20 years and you want to

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the price of the bill

A T-bill with face value $10,000 and 80 days to maturity is selling at a bank discount ask yield of 2.7%.

  Explain to wendy objectives of system of internal control

Your friend, Wendy, plans to open a hair salon. Wendy states that she does not have time to develop and implement a system of internal controls.

  Identify the evolving network of strategic relationships

Which of these relationships are the most important to Amazon? Explain your rationale.

  Need to do a pro-forma statement the solution should be

need to do a pro-forma statement the solution should be around 45000 something. the question is to replace an old mixer

  Development and fundraising

Identify the major components of comprehensive development program focusing on individual, corporate, and foundation donors.

  Expectation hypothesis

Expectation Hypothesis

  Estimate the company net income

If a company can expect an extra $2 million in sales if it enters a new market and it knows that 15 percent of its sales will be uncollectible, collection costs will be 2 percent on all new sales,

  Which of the following bonds has the most interest rate risk

Explain briefly the difference between interest rate ( or price) risk and reinvestment rate risk. Which of the following bonds has the most interest rate risk ?

  Analyzing financial techniques

What tools or techniques would you use in examine business strategies, financial reporting & disclosure policies, financial performance, forecasts & fundamental values?

  Del mare inc earned net income of 210000 during the year

del mare inc. earned net income of 210000 during the year ended december 31 2012. on december 15 2012 del mare inc.

  Corporate debt and equity

Write down the main differences between corporate debt and equity? Why do some firms try to issue equity in guise of debt?

  Ebit and optimal level of leverage

Describe EBIT and discuss why optimal level of leverage from a tax-saving perspective is the level at which interest equals EBIT.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd