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Question: Put yourself in the shoes of a company president: The extremely successful launch of a new product has resulted in an additional $5 million in unexpected operating cash flows. You can think of several ways to use the extra $5 million. One alternative is to pay out a special dividend to the shareholders. As president, you are accountable to the board of directors, which is elected by the shareholders. Rather than pay a dividend, you could repurchase shares of the company's own stock. The stock seems currently to be underpriced, and by purchasing treasury shares you are distributing surplus cash to shareholders without giving them taxable dividend income. You could also pay a special year-end bonus to your employees. With 500 employees, that would average $10,000 per employee, quite a nice holiday bonus. After all, it was the employees' hard work and dedication that earned the money in the first place. Or you could use the money to reinvest in the company. By reinvesting the money, it might be easier to continue the upward earnings trend in the future. Finally, you could approach the board of directors for a compensation adjustment of your own. It's been a great year, and you are the president of the company. Shouldn't you at least share in the success?
Required: Determine how you would allocate the additional $5 million. Are there other areas in which to spend the money not mentioned in the above case? Is it ethical for the president to be directly compensated based on the company's performance each year?
briarcrest condiments is a spice-making firm. recently it developed a new process for producing spices. the process
using the attached excel file respond to the following questionsassume that upc is issuing a 10-year 10000 par value
In addition, the company has a second debt issue on the market, a zero coupon bond with 9 years left to maturity; the book value of this issue is $69 million, the face value (also called par value) is $84 million, and the bonds sell for 76 percent..
the first step of the accounting cycle is toa. record journal entries.nbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbsp b.
Compare and contrast the two companies in terms of their use of business analytics to improve their position in the industry. You may select an organization you currently work for or one that you worked for in the past.
Because the market interest rate increased immediately before the bonds were sold, the city received only $23.5 million from the bond sale. What was the semiannual interest rate when the bonds were sold?
Could a profit-oriented enterprise use fund accounting practices? Comment.- How many members serve on the GASB? How many votes are needed to issue a pronouncement?
Explain why limited leverage is good for business. Show the profitability of the project so that Stephanie can convince her father to purchase the truck by borrowing money.
What is the maximum possible gain?
suppose you plan to retire in 40 years. if you make 10 annual investments of 1000 into your retirement account for
Explain the theory of purchasing power parity (PPP).- Based on this theory, what is a general forecast of the values of currencies in highly inflated countries?
why is it important to understand the ability to evaluate investments in fixed assets when analyzing an organizations
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