Why Would a Company Want to Reduce Their Capacity? Give

question 22

Essay

Why would a company want to reduce their capacity? Give an example of how they reduce capacity?

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Definitions:

Basic EPS

A measure of a company's performance that divides earnings available to common shareholders by the average number of common shares outstanding.

Diluted EPS

A performance metric that calculates a company's earnings per share (EPS) assuming all convertible securities were converted to common stock.

Treasury Stock

Shares bought back by the issuing company, reducing the amount of outstanding stock on the open market.

Conversion of Debt

The process of converting debt into equity, typically by exchanging bonds or loans for shares of stock in the issuing company.