Sara Larson is the chief financial officer of Rockboro Machine Tools Corporation, a large CAD/CAM (computer-aided design and manufacturing) equipment manufacturer. Sometime in 2015, she was faced with the challenge of deciding whether to pay out dividends to the firm's shareholders, or repurchase stock. If she chooses the first option, she must also come up with the amount of the payout. Another issue, in this case, is whether the company should go into corporate-image advertising and change its corporate name to reflect its new outlook.n

What are the problems here, and what do you recommend? What should Larson recommend?