Two Banks (Franklin and Lincoln)compete for Customers in the Growing

question 14

Essay

Two banks (Franklin and Lincoln)compete for customers in the growing city of Logantown.Both banks are considering opening a branch office in one of three new neighborhoods: Hillsboro,Fremont,or Oakdale.The strategies,assumed to be the same for both banks,are:
Strategy 1: Open a branch office in the Hillsboro neighborhood.
Strategy 2: Open a branch office in the Fremont neighborhood.
Strategy 3: Open a branch office in the Oakdale neighborhood.
Values in the payoff table below indicate the gain (or loss)of customers (in thousands)for Franklin Bank based on the strategies selected by the two banks.
Identify the neighborhood in which each bank should locate a new branch office.What is the value of the game?

Analyze the effects of dividend policy adjustments on firm growth and investor income.

Evaluate the significance of the signaling effect in dividend announcements and stock repurchase decisions.

Recognize the importance of timing in purchasing stocks to receive dividends.

Understand the role of the IRS in the legitimacy of stock repurchases.

---

Definitions:

Fiduciary Duty

An obligation to act in the best interest of another party, such as the duty a trustee has to the beneficiaries of a trust.

Secretary Of State

A high-ranking official responsible for foreign affairs and administrative tasks within a government.

Treasurer

An official or executive in an organization responsible for managing and overseeing financial affairs and funds.

Chief Information Officer

An executive role responsible for managing and implementing information and computer technologies in an organization.