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Prada has ten million shares outstanding, generates free cash flows of $ 60 million each year and has a cost of capital of 10%. It also has $40 million of cash on hand. Prada wants to decide whether to repurchase stock or invest the cash in a project that generates free cash flows of $2 million each year. Should Prada invest or repurchase the shares?
8th Amendment
An amendment to the U.S. Constitution that prohibits the federal government from imposing excessive bail, excessive fines, or cruel and unusual punishment.
Cruel and Unusual Punishment
Punishment that is considered unacceptable due to the suffering, pain, or humiliation it inflicts on the person subjected to it.
Deontological Theory
An ethical theory that suggests actions are morally right or wrong based on adherence to rules or duties, regardless of the outcomes.
Consequences
The outcomes or effects that result from a particular action or set of actions, often used in moral and ethical considerations to evaluate the rightness of actions.
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