Would a company paying nearly 100% of its Free Cash Flow towards cash distributions (instead of retaining earnings) have any bearing on the likelihood of splitting their stock? That is, if a company uses 100% of its FCF for dividends, would it make it more likely that the company woud split their stock (perhaps from an increase in stock price, create a stock price outside the optimal range)?
Would a company paying nearly 100% of its Free Cash Flow towards cash distributions (instead of retaining earnings) have any bearing on the likelihood of splitting their stock? That is, if a company uses 100% of its FCF for dividends, would it make it more likely that the company woud split their stock (perhaps from an increase in stock price, create a stock price outside the optimal range)?
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Which one of the following statements about common stock is correct?
| A. Firms tend to repurchase shares of their outstanding stock when they view the shares as undervalued. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| B. Treasury stock is a means of increasing the number of shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| C. Transaction costs cannot be expected to significantly reduce the rate of return on stock investments. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| D. Common stock gives stockholders first title to a share of the company's earnings, prior to other corporate obligations. ---- Tiffany owned 1000 shares of GIA stock which was selling for $1.50 per share when the company declared a 1 for 10 reverse split. After the split, Tiffany owned
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