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Acompany'sgearingis well below its optimal level and therefore it is considering implementing a share re-purchase programme.
This programme will be funded from the proceeds of aplannednew long-term bond issue.
Its financial projectionsshow no change to next year'sexpectedearnings.
As a result, the companyplans to pay the same total dividend in future years.
If the sharere-purchase is implemented, whichTHREEof the following measures are most likely to decrease?
Suggested Answer: A, C, F
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7 comments · newest first
SH
Sherrell
12 months ago
Gearing will definitely decrease, that's a given!
LE
Leontine
1 year ago
Interest cover should definitely drop with more debt.
SH
Sherly
1 year ago
Wait, how can they maintain the same total dividend with fewer shares?
JA
Jarod
1 year ago
Totally agree, share buybacks usually boost stock prices!
SH
Sharee
1 year ago
The cost of equity will likely decrease.
GA
Gayla
1 year ago
I'm a little confused by this question. The deployment is forecasted to need 256 GB, but the options include 512 GB, 1 TB, and 2 TB. Does that mean the minimum amount that can be allocated is actually higher than 256 GB? I'll have to re-read the question carefully and think about it some more.
RA
Raul
1 year ago
This seems like a pretty straightforward Scrum question. I'd probably start by reviewing the Scrum framework and the responsibilities of the Scrum Master.