A fiRm fiNds That It Has an Unusual Amount of Extra

question 328

Essay

A firm finds that it has an unusual amount of extra cash at the end of its fiscal year. It is considering
pursuing one of the following as a means for distributing it to the shareholders. What are the pros
and cons of each?
It could pay an extra cash dividend
It could increase its regular dividend
It can use the money to repurchase stock

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Definitions:

Diversify

To diversify means to broaden or vary a range of products, investments, skills, etc., to reduce risk or increase the chance of success or improvement.

Knowledge Application

The process of applying acquired knowledge in real-world contexts to solve problems or achieve specific outcomes.

Job Activities

Tasks, duties, and responsibilities performed by individuals in their occupations.

Strategic Leadership

The capability of influencing others towards the achievement of long-term organizational goals by setting vision, direction, and crafting strategies.