But its payout ratio was unsustainable. Hence, the optimal way is to reduce its shares outstanding with a stock repurchase. by repurchasing shares, the company could adjust its unbalanced capital structure, and even raise debt to finance its purchase. It also will send a signal to the market that the share may currently be undervalued, and thus boost the share price. If the share is fairly priced, market could also interpret the repurchase behavior as a positive signal that the board has confidence in the company’s future performance.
This misalignment was due to the fact that the technology would reduce the need for more base stations and ATT sales people were paid on the number of base stations sold. ISC would be powerless to motivate the sales force. Factors that favored the aftermarket decision include the fact that in the long term, these customers would be the ultimate adopters of the technology. In turn, these customers could demand that OEM install ISC’s products. While ISC would need to train and use their sales force and provide servicing, they would at least have control over the customer interaction from beginning to end.
It might be acceptable from their point of view for this reasoning. Do to the fact, if they suffer losses, they may have to shut down their business. This in turn will lead to fewer jobs, reduced competition and even higher gas prices. This is why gas is the price it is now. Question 15, Chapter
Still, Grassner’s main concern was that directors might become complacent if their targets were easier to achieve. Gassner proposed that business plans and bonus targets for each country needed to be modified, while regional managers didn’t want to take it even into consideration. On the one hand, I have to agree with Gassner that they should change the business targets for each country to reflect the new manufacturing price, and then using these figures as the basis for calculating the managing directors’ bonuses. This route would be the best for the company, preventing employees from complacency, but more importantly holding managing directors accountable for their own performance. BMG International should take full advantage of these savings, and use the $20 million in a way that benefits the company as a whole.
Since the UK is a net importer of oil, higher oil prices would damage economic growth more than it benefitted it, as we’d have to pay more as a country in order to acquire the oil that we needed. Oil being a large part of consumer consumption would also contribute to economic slowdown: the higher prices of petrol and other oil-related products would mean that overall consumption decreases as consumers are forced to pay a higher price on certain goods and services. Higher oil prices would also lead to decreased consumer confidence as consumers may not feel comfortable with having to pay so much for petrol or other oil-based products, and therefore would also result in a decrease in overall consumer spending. This would also have negative implications on businesses as well: a decrease in consumer spending would subsequently lead to a decrease in the revenues businesses are able to make due to decreases in consumer spending. A rise in oil prices would also directly affect business performance as oil is a cost of production to firms, especially to those which produce oil related products, hence reducing profits and limiting the amount of money that firms can reinvest.
It can totally change the establishing market structure and market share. * Determining if a technology is disruptive or not can be done by checking the following: 1) Mainstream customers will reject a disruptive technology. 2) The marketing and financial mangers may not support it since they want to maximize the profit in the current period, because a disruptive technology would require a concentrated effort and share the company’s budget. 3) The technical managers would support it as they can foresee the technical trends. 2.
This will make Tesco more motivated to achieve their targets and objectives. If Tesco didn’t have a budget within their business, the team wouldn’t have anything to aim for and won’t have any way of knowing how the business is doing. However, if Tesco’s budget is unrealistic or too aspirational then they are likely to give up and not hit the target. Furthermore, if Tesco didn’t have a budget then it’s likely that they’d produce too much stock which most it will be thrown away leading to an increase it waste products and this shows that Tesco is spending way too much money on stock that isn’t needed which is why it’s vital that they create a budget and control their costs. Without a budget, Tesco won’t know how much they spent in
To maximize the profit, competitors would increase supply with low prices, and the government changed regulations that could trigger to reduce oil consumption and strengthen substitutes. The market would become saturated and slow-growth that cause less profitability. Analysis First, changes in oligopoly form trigger perfect competition. Although oil industry had been monopoly by OPEC which has more than 70% of world oil reserve and more than 40% of world oil supply, vertically integrated companies, called super-majors that perform exploration, development, refinery, and sales, affect oil prices. These super-majors disturb price control by OPEC because when OPEC raises oil price, super-majors raise oil supply.
Furthermore, a cut in taxes depends on It depends on other components of AD. For example, if confidence is low, cutting taxes may not increase consumer spending because people prefer to save. Moreover, if the economy is close to full capacity an increase in AD will only cause inflation. Expansionary fiscal policy will only reduce unemployment if there is an output gap. Supply side policies include any action by the government intended to increase the amount that firms are willing to supply at any given price level in which they seek to shift the aggregate supply curve to the right.
The government would almost certainly have to intervene to prevent massive layoffs caused by companies’ loss of profits. Even government intervention could not guarantee a failure here. But wait; let’s take another look at the same production possibilities curve. At some point on the curve we reach the point of diminishing returns. We could work harder and still not dramatically increase production.