janet wu, the treasurer of wilson paper company. if you were an

 

Get a plagiarism free copy of this essay from our experts
janet wu, the treasurer of wilson paper company. if you were an
Just from $13/Page
Order Now

Here is the discussion question and two forms of the answer. Please answer the question using the two answers I have provided for assistance. In other words, take the two answers, combine them and, rewrite them to create a new answer. Please use one reference. Thank you

 

 (Discussion Question)

 

The workbook presented a story about Janet Wu, the treasurer of Wilson Paper Company. If you were an investor in Wilson Paper Company, would you be happy with an open market repurchasing of shares? Why or why not? Support your stance using evidence from the story and information from the chapter.

 

(Answer 1)

 

When considering the being an investor in the Wilson Paper Company there are different factors to considered. What will be the value of the stock when purchasing and the value after the stock is repurchased.

 

 

 

According to the authors Clayman, Fridson, Troughton, Scalan ,(2011) the value of the stock is $30 a share, but the cost is $35 a share. Stock repurchase increases in volume when the economy is steady, creating profits for companies to have more cash.

 

 

 

According to Investopedia, repurchasing of shares of stocks from a company who original sold the shares is considered stock buybacks.  This process is demonstrated when the original company who issued the stock pays market values to shareholders for the stock that is undervalued and reissue the stock when the market is corrected. The company increases its equity capital without issuing any additional shares.

 

 

 

                                                                   Reference

 

 

 

Clayman, Michelle; Fridson, Martin; Troughton, George; Scanlan, Matthew.(2011).Corporate Finance:

 

 

 

                                A Practical Approach,2nd Edition. John Wiley & Sons

 

 

 

Stock Buybacks. (2016). Investopedia.com

 

 

 

(Answer 2)

 

A company can return wealth to its shareholders by stock price appreciation and dividends (Jansen, 2015). It is a good idea for share repurchasing because this means the company is investing in itself by using cash to buy its own shares (Jansen, 2015). The company absorbs the repurchased shares and any outstanding shares will be reduced in the market. Essentially, investor ownership stake increases with fewer shares on the earnings of the company (Jansen, 2015).

 

 

 

According to Clayman, Fridman, and Troughton (2012), the dividend policy of share repurchasing has many advantages that include tax advantages, share price support/signaling of a good investment, added managerial flexibility, offsetting dilution from employee stocks, and increasing financial leverage. In addition, the uses of repurchasing of shares are used to improve financial rations (balance sheet, ROA, ROE) and when the market has discounted share price too steeply. Repurchasing of shares would be good for stock that is undervalued and marked as a positive sign for shareholders. However, repurchasing of shares for short-term relief to pump up ratios to fix an ailing stock price or getting out of dilution has the opposite effect (Jansen, 2015).

 

References

 

 

 

Clayman, M., Fridson, M., & Troughton, G. (2012). Corporate finance. A practical approach. Second Edition. John Wiley & Sons, Inc. Hoboken, New Jersey.

 

 

 

Jansen, C. (2015). Stock buybacks: breakdown. Investopedia. Retrieved from http://www.investopedia.com/articles/02/041702.asp

 

(Answer 2)

 

A company can return wealth to its shareholders by stock price appreciation and dividends (Jansen, 2015). It is a good idea for share repurchasing because this means the company is investing in itself by using cash to buy its own shares (Jansen, 2015). The company absorbs the repurchased shares and any outstanding shares will be reduced in the market. Essentially, investor ownership stake increases with fewer shares on the earnings of the company (Jansen, 2015).

 

 

 

According to Clayman, Fridman, and Troughton (2012), the dividend policy of share repurchasing has many advantages that include tax advantages, share price support/signaling of a good investment, added managerial flexibility, offsetting dilution from employee stocks, and increasing financial leverage. In addition, the uses of repurchasing of shares are used to improve financial rations (balance sheet, ROA, ROE) and when the market has discounted share price too steeply. Repurchasing of shares would be good for stock that is undervalued and marked as a positive sign for shareholders. However, repurchasing of shares for short-term relief to pump up ratios to fix an ailing stock price or getting out of dilution has the opposite effect (Jansen, 2015).

 

 

 

 

 

 

 

 

 

References

 

 

 

Clayman, M., Fridson, M., & Troughton, G. (2012). Corporate finance. A practical approach. Second Edition. John Wiley & Sons, Inc. Hoboken, New Jersey.

 

 

 

Jansen, C. (2015). Stock buybacks: breakdown. Investopedia. Retrieved from http://www.investopedia.com/articles/02/041702.asp

 

 

 

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 15% with the discount code COCONUT