• Home
  • Subjects
  • Marketing
  • Response to Wall Street Journal Article Entitled: Cash-Rich Firms Feel Pressure to Spend

Response to Wall Street Journal Article Entitled: Cash-Rich Firms Feel Pressure to Spend - Essay Example

Only on StudentShare

Extract of sample
Response to Wall Street Journal Article Entitled: Cash-Rich Firms Feel Pressure to Spend

There are indeed certain tradeoffs with each mode of reducing cash holdings. Increased dividend payments indeed increases the public view of the stock, and keeps the shareholders happy, but it creates a precedent that will always be looked at in the future. For example, if a firm declares high dividends this year, and for the next five years cannot match that dividend declaration due to economic and financial problems, shareholders and analysts will state that the company is underperforming thus resulting in fewer profits and less dividends in comparison to the one declared this year.
Share buybacks are a good way of decreasing the equity of a firm, but by decreasing the size of a firm controlled by investor’s equity, puts more power into the control of management which may lead to less checks and balances with regard to corporate acts which normally would alarm a shareholder. Many firms have gone belly up because top management acted in ways that greatly prejudiced the firm despite the voiced out concerns of a minority of shareholders. Indeed, just as the logic underlying this paper is that a balance between cash and debt on a balance sheet is good, so too is a balance between management and shareholder equity in control of a firm. ...Show more

Summary

The article highlighted the fact that corporations are under pressure from market investors, shareholders and from the corporation itself, to divest or to release much of the cash assets that it holds, in the form of dividends, share buybacks, or increased investments.

Author : marcia41
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Response to Wall Street Journal Article Entitled: Cash-Rich Firms Feel Pressure to Spend"
with a personal 20% discount.
Grab the best paper

Related Essays

Analysis of Lyer and Davenport's "Reverse Engineering: Google's Innovation Machine"
Hence, the company offers good insights on business strategic direction to firms in the same industry and even in other sectors outside the internet. Lyer and Davenport’s “Reverse Engineering: Google’s Innovation Machine” seeks to highlight these lessons from Google to show what can be reproduced from the company and how this can be done.
5 pages (1250 words) Essay
Personal Response Journal
The adolescent stage is characterised with confusion and the students were going though major changes both physically and emotionally. Eric Eriksson and Sigmund Freud explained these in their theories of child development which gave clear warning to educators to handle the students with caution and to give them a lot of understanding.
8 pages (2000 words) Essay
Cash Flows
For both independent and mutually projects, the IRR does not have a clear decision rule for project acceptance, unlike NPV that has a clear rule, that is, accept the project if its NPV is positive. If the project is an investing project, the decision rule for accepting the project is to accept the project if the IRR is greater than the discount rate.
8 pages (2000 words) Essay
Johnny Cash
It gives audience a clear idea about the early days of his life spent on his father's farm, and his days in the Germany Air Force. After his return from Germany, his music career took off. Later he gave audition to Sam Phillips who owned the Sun Records (the label that founded Elvis Presley, Jerry Lee Lewis, Roy Orbison, and Carl Perkins etc).
2 pages (500 words) Movie Review
Psychology Journal Article Summary
In forming this alliance, the client is better able to learn of themselves and to share with the therapist their innermost thoughts and feelings. Freud, one of the primary users of the therapeutic alliance at its inception, encouraged the use as a way to bridge the gap between client and therapist.
2 pages (500 words) Essay
"Occupy Wall Street"
Guided by concepts from Douglas Holt (Holt & Cameron, 2010) we will discuss potential options that Apple could enact in order to capitalize upon the Occupy
2 pages (500 words) Essay
Article critique in the journal of consumer behavior
The article also provides an explanation in regard to relationship between the credit card premium and pain in payment where the behavior of consumers is highly affected by the degree to which they feel the pain of payment when they are parting with their earned cash. The authors also points out that with the use of other mode of payment such as cash the consumers pain of payment is felt all the time when the transaction occurs.
2 pages (500 words) Essay
The assignment should be presented as a Journal opinion article and address an economic issue of current interest to Wall Street Journal readers.
This was the lowest level since last July. To this effect, the concern is whether the housing recovery is faltering, and thus if it is, what is the causes behind this effect? First, the
2 pages (500 words) Essay
Marketing plan
The colorful, refreshing, sweet tea combines green or black tea with milk, fresh fruit juices or the pulp-loaded fruit concentrates. As its unique feature, the drink contains little balls (bubbles) which are of starch. The bubbles are filled
3 pages (750 words) Essay
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT