User Account

All Pages

Purchase of treasury shares to the payment of dividends

Assignment Help Finance Basics
Reference no: EM132689492

Treasury stock is being purchased with increasing frequency in lieu of dividend payments.

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

Reference no: EM132689492

Questions Cloud

Discuss the major competitors in global e-commerce : Circuit City was an American consumer electronics company founded by Samuel Wurtzel in 1949. By 1990s, Circuit City became the second largest consumer.
Explain present value of the tax shield : If they sell $500,000 in perpetual bonds with a 9 percent coupon, what would be the present value of the tax shield? Assume the marginal tax rate is 35%.
French senate is considered as being weakest body : The senate in the united States is cinsidered as being the most powerful body of the Congress whereas the French Senate is considered as being the weakest body
Explain the justification for requiring lessees : Explain the justification for requiring lessees to capitalize certain long-term leases. Do no limit your discussion to the specific criteria for classifying a l
Purchase of treasury shares to the payment of dividends : Explain why the investors might prefer that firms use excess cash to purchase treasury shares rather than pay dividends.
Explain how cyber-attack can cause economic damage : There are a variety of ways that a cyber-attack can cause economic damage. In many cases, attackers try to "penetrate" systems in order to steal technology.
Explain the importance of inventory management : Note: When converting annual data to daily data or vice versa in these problems, assume there are 365 days per year.
Mitigate negative consequences of interest groups : What specifically do you think should be changed to mitigate the negative consequences of interest groups while maintaining the positive impacts
Find equity financing and debt financing : What is the difference between Equity Financing and Debt Financing. Please provide example of both

Reviews

Write a Review

Finance Basics Questions & Answers

  What is a debenture

Explain how this repurchase would affect (increase, decrease, or have no effect on) the components of the accounting equation: assets, liabilities, shareholders' equity. Would a gain or loss be recognized on the transaction?

  Define and explain the theory of comparative advantage

1. Theory of Comparative Advantage. Define and explain the theory of comparative advantage. 2. Limitations of Comparative Advantage. Key to understanding most theories is what they say and whatthey don't. Name four or five key limitations to the th..

  What is the required return on an investment

What is the required return on an investment with a beta of 1.3 if the risk-free rate is 2.0 percent and the return on the market is 8.1 percent?

  Explain the types of annuities and compare any two of them

explain the types of annuities and compare any two of them. In your post, state why these concepts are important for both managers and investor to build wealth.

  Is melba required to recognize income

An employer provides all of his employees with life insurance protection equal to twice the employee's annual salary. Melba, age 42, has an annual salary.

  Operate and that the cash flow statement

The purpose of the cash flow statement to the business is to allow the company to effectively operate and that the cash flow statement provides

  Go to the finra bonds quick search

Assume interest rates for bonds today is 5% for an AAA rated bond. Calculate the price of the bond you have selected relative to the 5%.

  Innovative practices in a health care industry

1. Describe the importance of seeking improvements & innovative practices in a Health care industry?

  Estimate the jensen alpha for stock in annualized terms

You have run a regression of stock returns against market returns, using monthly dataover the last three years for Golden Books.

  We all know that mortgages have risk

We all know that mortgages have risk. Discuss those risks and give examples to illustrate your point.

  Given the information on the company

You are given the information on the company. Total market value is= $38 million. Company's capital structure, given here, is considered to be optimal.

  What is the percent forward premium

You observe that the spot price of the Swiss franc (CHF) is 1.02 USD/CHF, and that the 1 year forward rate is 1.15 USD/CHF. What is the percent forward premium?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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