Podcast
Play an AI-generated podcast conversation about this lesson
Questions and Answers
What is the main reason that a company's stock price might drop after a share buyback program?
What is the main reason that a company's stock price might drop after a share buyback program?
- The company is trying to reduce the number of outstanding shares
- The company is signaling that its shares are overvalued
- The company is facing financial difficulties and is not healthy (correct)
- The company is indicating that it lacks growth opportunities
If a company has a dividend payout ratio of 20%, what is the company's retention ratio?
If a company has a dividend payout ratio of 20%, what is the company's retention ratio?
- 50%
- 80% (correct)
- 100%
- 20%
Which of the following is NOT a potential downside of a company conducting a share buyback program?
Which of the following is NOT a potential downside of a company conducting a share buyback program?
- It can signal that the company lacks growth opportunities
- It can make the stock more attractive to potential investors (correct)
- It can create challenges for the company during an economic downturn
- It can be ill-timed and lead to a drop in the stock price
If a company has $100 million in net income and pays out $20 million in dividends, what is the company's dividend payout ratio?
If a company has $100 million in net income and pays out $20 million in dividends, what is the company's dividend payout ratio?
Signup and view all the answers
Which of the following is a potential pro of a company conducting a share buyback program?
Which of the following is a potential pro of a company conducting a share buyback program?
Signup and view all the answers
