Distributions to Shareholders When should cash be distributed to shareholders as opposed to staying in the firm?
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Distributions to Shareholders
- When should cash be distributed to shareholders as opposed to staying in the firm?
- What is a stock repurchase program and when it is wise to use them?
- Explain the pros and cons of repurchases.
- Why are non-dividend paying firms reluctant to start paying a dividend?
- Why do firms continue to pay and even raise dividends when earnings are low?
- What is the clientele effect?
- Why are dividends said to have information content?
- Explain the residual dividend model? Why is it almost never used strictly?
Capital Structure Decisions
- Explain business risk and financial risk.
- What are some of the main contributors to business risk?
- What causes financial risk?
- What is operating leverage?
- What is positive financial leverage?
- Explain signaling theory as it relates to the use of stock and debt.
- Why is it a good idea to have reserve borrowing capacity?
- How does the use of debt constrain managers and reduce agency costs?
- Explain the rationale for a firm going from private to public.
- Explain the IPO process from beginning to end.
- Why would a firm choose to go from public to private?
- Would you expect a highly leveraged private firm to be more or less efficient than a less leveraged public firm? Explain.
- Explain the major types of leases: operating, financial, sale-and-leaseback, synthetic.
- Explain the tax effects of leasing from the lessees standpoint.
- Explain how to calculate the NAV.
- What makes leases attractive to a lessor?
- Understand the differences for real estate leases and vehicle leases.
- Explain why tax law is such a big determinant of leasing attractiveness.
- What are some valid reasons for leasing?
- What is a warrant and when are they commonly used?
- What is a convertible and when are they commonly used?
- What are the major things I would need to know about both warrants and convertibles?
- What is an exchange rate?
- As an exporter, would you want your home country’s currency to be strong or weak? Explain.
- What economic factors cause a country’s currency to be strong relative to other currencies?
Related Book For
Fundamentals of Investing
ISBN: 978-0133075359
12th edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
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