Question
1. We discuss capital budgeting methods and processes. Could you apply the knowledge to make better decisions in your personal life or professional duties?Please elaborate
1. We discuss capital budgeting methods and processes. Could you apply the knowledge to make better decisions in your personal life or professional duties?Please elaborate on your answer with examples.
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2. The stock repurchase is a decision by companies to buy their own shares in an effort to help boost earnings per share and stock prices.A recent article published on WSJ (https://www.wsj.com/articles/companies-mull-suspending-ramping-up-share-buyback-plans-amid-coronavirus-11584477343) reported that financechiefs are debating whether to make share repurchases or hold on to cash as stock prices fall on fears surrounding thecoronaviruspandemic since theS&P 500 has plummeted about 25% from Feb. 18. Some companies appear to be taking advantage of the down market, announcing plans to scoop up shares. Others, however, have said they would suspend share buyback plans to preserve cash and exercise caution in an uncertain period. They argue that they need to stay sufficiently capitalized to resist financial hits from economic conditions spurred by the pandemic. In some instances, businesses have opted to raise cash by drawing down credit facilities with lenders.
Why have selected companies decided to suspend their share repurchases?Why have other companies authorized share repurchases?If you were the CFO of a retail business like the Gap, what would you do? If you were the CFO of Oracle, what would you do?
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