What effect do share repurchases have on the value of firm

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Reference no: EM131336788

1. What effect do share repurchases (undertaken as part of the firm's dividend decision) have on the value of the firm?

2. You are the holder of common stock in the G. Lewis Apartment Renovation Company. Historically, the firm has paid generous cash dividends.

The firm has recently announced that it would replace its cash dividend with a 20 percent annual stock dividend. Is this good news, bad news, or is it impossible to tell from the information provided? Explain the reason for your answer.

Reference no: EM131336788

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