Question
On 13th September 2022, the Swiss bank UBS announced a dividend increase and stock buyback plan. Read the following excerpts from an article on Financial
On 13th September 2022, the Swiss bank UBS announced a dividend increase and stock buyback plan. Read the following excerpts from an article on Financial Times and answer the questions.
a. On the announcement of the plan, "UBS shares rose 1 per cent in early trading on Tuesday". Use signalling to explain this market response for both the buyback and dividend increase.
b. To payout the earnings, UBS is using both the cash dividend and share buyback. Compare these two forms of payout for UBS.
c. What is the implication of this increased payout on UBS managers' incentive?
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a The market response of UBS shares rising 1 in early trading on Tuesday can be explained by signaling theory Signaling theory suggests that companies use various actions to signal their financial hea...
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Financial Reporting and Analysis
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
7th edition
1259722651, 978-1259722653
