What was the primary motivation for Apple (and others) to undertake a stock split?To raise more cash for the company through increasing the number of shares on the marketTo make the price of their shares seem more affordable to investorsTo decrease their number of share outstanding in order to increase EPSO To raise more cash for the company through a stock issuanceQuestion 11What could be a major motivation for Walmart (and others) to undertake a share repurchase?O To purchase cheaper shares today and reissue later at a higher priceTo make their shares seem more affordable to investorsBecause they have no other options to use their cashO To get additional cash today in order to invest in other projects

"Since you have asked multiple question, we will solve the first question for you. If you want any…

What was the primary motivation for Apple (and others) to undertake a stock split? O To raise more cash for the company through increasing the number of shares on the market O To make the price of their shares seem more affordable to investors O To decrease their number of share outstanding in order to increase EPS To raise more cash for the company through a stock issuance

What was the primary motivation for Apple (and others) to undertake a stock split? O To raise more cash for the company through increasing the number of shares on the market O To make the price of their shares seem more affordable to investors O To decrease their number of share outstanding in order to increase EPS To raise more cash for the company through a stock issuance

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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In what way is a preferred stock usually more similar to a bond than to a common stock? O a. Preferred stockholders are more risky than common stocks O b. Preferred stockholders elect the board of directors of the organization O c. Preferred bondholders participate in the growth of the company through increases in dividends and stock prices O d. Preferred stockholders are typical entitled fixed payments O e. If the company were to go into liquidation, preferred stockholders will be entitled to payments after common stockholders are paid-off
In a few sentences, answer the following question as completely as you can. You are discussing stock valuation techniques with your broker. You mention that your Finance professor stated that “a stock that will never pay a dividend is valueless.” Your broker says this is not true because you can always sell the stock to someone else (thus, a capital gain is possible) a share of stock represents a share of ownership in something tangible (i.e., the issuing firm).Argue for or against your broker’s position.
What are disadvantages for a company to go public by issuing equity in an initial public offering (IPO)? Question 16 options: a) It reduces information asymmetry for competitors b) Class action lawsuits can occur following large stock price drops c) It can attract analyst following resulting in myopic decisions d) All of the above are disadvantages of an IPO e) None of the above are disadvantages of an IPO
Dividend policy and company value: You have just encountered two identical companies with identical investment opportunities, as well as the ability to fund these opportunities. You have found that one of the companies has just announced an introductory dividend policy, whereas the other has continued with a no-dividend policy. Which of the two companies is worth more? Explain
Which of the following statements about payout policy is FALSE? a. Share repurchases concentrate ownership in the hands of the remaining shareholders, making their shares worth more than they were before the repurchase. b. Firms should generally pay out no more than their free cash flow to equity, unless they are in the process of paying out a large cash balance. c. Dividends typically increase at a slower rate than earnings. d. Firms today return more cash to shareholders through repurchases than through dividends. e. Dividends are lower for firms that have higher growth rates.
The more you have invested in a stock, the more likely you are to be interested in monitoring the company's management to ensure they are maximizing shareholder wealth. Question 28 options: True False
Question: I have a question about the stock market. I've never understood and always puzzled about something extremely basic and fundamental about how the stock market works. According to my understanding, a firm issues a certain number of shares, and the value of those shares is determined by supply and demand. However, it appears that I, and anybody else, can purchase or sell any number of shares at the present stock price at any time. So, what is the mechanism that influences the price of a stock? If I check at the stock price of business X and find that it is selling for $100 a share, I, like anyone else, can pick whether to buy one share for $100 or one million shares for $100. So, what causes the stock price of firm X to rise or fall to $100.01 per share or $99.99 per share? The stock price does not appear to move up unless all available shares have been purchased, nor does it appear to move down unless there are persons prepared to sell shares for less than the market asking…
Explain why the following statement is wrong (1 paragraph maximum): "The main reason why some companies prefer to return cash to shareholders through stock repurchases, rather than dividends, is because repurchases reduce the number of share outstanding and thus tend to increase the stock price."

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