Rather than increase the number of shares of common stock outstanding, a company may want to reduce the number of such stocks. It can accomplish this with a reverse stock split. Say for a reverse split of 1-4, the shareholders would be given one new share in exchange for four current shares.As with stock dividends [...]
One of the most comprehensive investment arguments for the irrelevance of dividends was provided by Modigliani and Miller in their research.
They asserted that given the investment decision of the firm, the dividend payout ratio is a mere detail and that it does not affect the invested wealth of the shareholders. The argument is that [...]
The prime reason for the existence of leasing is that the companies, individuals and financial institutions derive different tax benefits from the ownership of assets. The marginally profitable company may not be able to reap the full benefits of accelerated depreciation, whereas the high income taxable corporation or individual is able to realize such. The [...]
Most of the individuals do not plan out their financials early in the life. One of the prime reasons they feel is that what’s the hurry – there’s enough time left. The later you start the weaker you end. Finance and growth are a function of time and not luck. Let us understand this through [...]
One of the most enigmatic financial and investment strategies of the companies has been the stock split. Why is such a stock split done and how does it affect the company, its finance? How does the stock split affect the investment decision of the investors?
With a stock split the number of shares is increased through [...]
