From the left column of the table below, select one company that has undertaken a share repurchase. From the right column, select one company that has undertaken a share split. Contrast and compare the reasons for their decisions and evaluate the impact on each company. Refer to Week 9 lecture notes for a review of concepts related to Dividend Policy
The company that I selected is Microsoft Company that performs a stock split and the company that performs a repurchase of its shares is Oracle Company.
Stock split refers to the company decision of issuing new shares to the existing shareholders of an organization on the basis of their holding. That is the proportion of ones holding in an organization is used as the ration of issuing new shares to the existing shareholders (Lazonick, 2008).
The share repurchase is the firm’s decision to buy back or acquire its own stock so as to make a relative and a flexible way of returning the money to the shareholders.
Reasons why the two companies perform a stock split and stock repurchase
The two companies that are Microsoft and Oracle perfumed the two operations so as to increase its level of capitalization and make its shareholders better when it comes to raising the capital in the organization. On the other hand, Oracle also perform the share repurchase with the main implication being to meet the firms level of obligation, that is a change in the tax code and this will help the firm be in a position of meeting the tax obligation and increase its level of compliances, (Elgonemy, 2000)
Both firms performed the stock split and share repurchase with the aim of stabilizing the market. That is through the stock split by the firm, the market remained stable and in this case, it means that the firm stood in a position of meeting its obligation and the shareholders remain in the same capitalization it was before the split and at the same time, with Oracle company, performing a share repurchase was to stabilize its market so as to remain in a stable position of compliances to the tax regulations.
Both are geared towards increasing the yield of the organization. That is with stock buyback, it means that the firm tries to refund the money back to its shareholders and on the other hand, with the stock split the firm tries to reduce the buying prices of stock and stabilizing the firms level of capitalization. All these are performed with the main implication being to make the firm stable increase the dividends yield in the organization.
Both are performed by the company with the aim of strengthening the firm and in the long run, it will lead to a better capitalization of the organization. Since, when an organization split its shares, it tries to diversify the stock and make these firms better in terms of yield and increase its sustainability as an organization, (Greenwood, 2009).
Both help the firm to jump in a stock position where it will stand in a position of increasing its credit rating as this shows that there is less capitalization as the organization works towards establishing a well-structured capital structure.
Both increase the efficiency of the organization. That is through a stock split, it will help the firm attain a stock capitalization that helps in increasing the value of the firm. On the other hand, efficiency is attained by stock repurchase as the cost that will be used by the company will have been reduced and this will help to increase the level of firms cost hence increasing its cost efficiency.
Difference
The main aim of Microsoft performing stock split is for the purpose of capitalization and the end result is that it lead to a reduction in the price of shares whereas, on the other hand, repurchase of shares by the oracle lead to an increase in the capitalization and the share price increased, (Cusumano, 2008).
The main rationale of a stock split is to increase the number of shares that are available for the public to trade in and in the long run, it will help the firm meet its obligation and increase the public shares to be availed for purchase. Whereas with the repurchase, it helped the firm to reduce the number of shares that are offered to the public and its main rationale is to reduce the shares that are offered to the public for subscription.
Stock split leads to the strong price action of the company shares whereas stock repurchase is only performed by the company with its main rationale being to ensure that the firm attains stability and lower the cost of stock management when it is trading publicly.
Conclusion
The strategy that is performed by the company is to ensure that having repurchase or stock split is to ensure that there are better performance and effectiveness as an organization. It also ensures that as a firm, the management stands in a position to control the factors within the company, lowers its level of profitability and increase the value of the organization as it trades publicly.
Listing the stock in an organization is a way of increasing the number of shareholders within the company hence increasing the level of stocks in the company. To attain this strategy, stock split and stock repurchase will ensure that as an organization, it stands in a position of influencing the general public to work towards attaining sustainable growth in their shares portfolio in the company.
Stock split and stock repurchase are for the protection of the shareholders. It ensures that as an organization, the dividends yield is sustained and that as an organization, there is an improvement in the firm’s level of capital growth and its sustainable performance.
References
Cusumano, M. A. (2008). Microsoft secrets: how the world’s most powerful software company creates technology, shapes markets, and manages people. Simon and Schuster.
Elgonemy, A. R. (2000). The pricing of lodging stocks. A reality check. Cornell Hotel and Restaurant Administration Quarterly, 18-28.
Greenwood, R. &. (2009). Investor activism and takeovers. Journal of Financial Economics, 362-375.
Lazonick, W. (2008). The quest for shareholder value: stock repurchases in the US economy. Recherches Économiques de Louvain/Louvain Economic Review, 479-540.
Get Professional Assignment Help Cheaply
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Why Choose Our Academic Writing Service?
- Plagiarism free papers
- Timely delivery
- Any deadline
- Skilled, Experienced Native English Writers
- Subject-relevant academic writer
- Adherence to paper instructions
- Ability to tackle bulk assignments
- Reasonable prices
- 24/7 Customer Support
- Get superb grades consistently
Online Academic Help With Different Subjects
Literature
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Finance
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
Computer science
Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!
Psychology
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
Nursing
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Sociology
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
Business
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
Statistics
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Law
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
What discipline/subjects do you deal in?
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Are your writers competent enough to handle my paper?
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
What if I don’t like the paper?
There is a very low likelihood that you won’t like the paper.
Reasons being:
- When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
- We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.
In the event that you don’t like your paper:
- The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
- We will have a different writer write the paper from scratch.
- Last resort, if the above does not work, we will refund your money.
Will the professor find out I didn’t write the paper myself?
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
What if the paper is plagiarized?
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
When will I get my paper?
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
Will anyone find out that I used your services?
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
How our Assignment Help Service Works
1. Place an order
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
2. Pay for the order
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
3. Track the progress
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
4. Download the paper
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!
