Which is the best course of action for flocks shareholders

Assignment Help Accounting Basics

Reference no: EM132749027

Question: Inc. is a public-listed film production company. In early 2020, it released the globally successful TV series "Safe Landing on Them" after a few failed productions. Despite the failures, Flock's shares have managed to hold steady, trading between $12 to $15 over the past 12 months. Flock's CEO strongly believes that the share prices are undervalued and in response, Flock's management has provided the following suggestions:

1. Declare dividends on the success of "Safe Landing on Them" as a reward to shareholders for their faith in the company; or

2. Undertake a share repurchase exercise at its current share price of $15.

a) Which, in your opinion, is the best course of action for Flock's shareholders? Justify your answer. Be sure to include relevant examples where appropriate.

b) Based on your understanding of Signaling Theory, what signal(s) will each of the suggestions send to the market? Explain your answer. Be sure to include relevant examples where appropriate.

Reference no: EM132749027

Questions Cloud

Management information systems : What is systems thinking and how can management information systems enable and (possibly) improve business communications?

Why the training and development office should be concerned : Which statement best explains why the training and development office should be concerned about helping supervisors learn and improve in their jobs?

What is the magnitude of the electric field : What is the magnitude of the electric field at a distance of 1.9 m from the center?

Prepare the journal entry to record the exchange : Marigold also paid $530 in the transaction. Prepare the journal entry to record the exchange, assuming the exchange lacks commercial substance

Which is the best course of action for flocks shareholders : Which, in your opinion, is the best course of action for Flock's shareholders? Justify your answer. Be sure to include relevant examples where appropriate.

Conducting constructive dialogue in organization : What are the preconditions for conducting constructive dialogue in an organization?

Analyze the roles of job posting : Analyze the roles of job posting, and skills inventories in recruiting from within and externally. Discuss strategies for recruiting a more diverse workforce.

What is the maximum capital cost allowance for the year : At the beginning of the year the undepreciated capital cost of the building was $330,000. What is the maximum capital cost allowance for the current year

What can conclude about characteristic of effective feedback : What can conclude about the characteristics of effective feedback? If they were a manager, how could one use these lessons to improve

User Account

All Pages