What is the importance of stock split

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Question - Companies continually struggle on whether they should issue and grow their dividends or retain the money back into the company itself as retained earnings. This is the difference between new growth companies that may not have any profits just yet and long-term established companies with a long history of earnings and distributions.

a. Which is more important to a company dividend payouts or retaining all the income and why? Give an example of each and why.

b. Related to this topic is that sometimes companies go through stock splits or repurchase of their own shares. What is the importance of stock split, stock repurchase, and reverse stock splits? List a pro and con of each along with an example of a company that has gone through this.

Reference no: EM133028285

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