Week 3 dq's Essay Example | Topics and Well Written Essays - 750 words

Week 3 dqs - Essay ExampleEven though the number of shares increase, the get along nurse of these shares remains the same thus resulting in no direct advantage. The benefit of stock splits is verbalize to only lie in the future. A lower share value can bring the merchandise share price to an acceptable trading range (Stickney, 2004, p. 545). The resulting higher trading volumes, more investors and continuing better performance of the association can potentially result in a higher stock price.Dividend insurance policy The dividend policy varies from company to company. A company can give dividends in form of cash or more stock for each share owned, have a stock repurchase offer, a combine of both, or to retain earnings and not announce any distribution of profits. Each has its merits and demerits. Cash dividends vex higher tax rates and usually appeal to investors who are low-end taxpayers. Stock dividends, in which additional company shares are offered at a proportion of ex isting shares dilute the shares and bring no immediate benefit to the shareholder. They only allow the investor to merely have a potential of future higher net value. rigorously from the shareholders perspective, stock repurchase can offer higher value to a hulking percentage of investors as the stock price increases after repurchase and if the investor sells, the money they gain by exchange stocks falls in the lower capital gains tax bracket (Bierman, 2001, p. 112). Finally, companies that retain their earnings offer value by gaining shareholder confidence in its growth and thus a higher stock price.Sources of gauge Capital Venture capital is offered by investors looking for unusually higher returns. They are willing to wager with higher risks and invest in companies with perceived profits or growth. The money can come without delay from these investors, specialized venture capital firms, investment banks or other financial or brokerage institutions with standardised investme nt policies.VCs Due Diligence Venture capitalists,