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which of the following is an action that company co-manager CAN take to boost a subpar...

which of the following is an action that company co-manager CAN take to boost a subpar roe

  1. A. decrease dividend payments and increase the company current ratio
  2. strive to boost the amount the company spends on corporate social responsibility and citizenship
  3. strive to boost the company's credit rating to A+ as fast as possible by avoiding all borrowing against the company's line of credit
  4. Repurchase shares of common stock and increase dividends payment (higher dividend payment act to reduce the amount of net income retained in the business) (retain earnings act to increase equity investment and thus dampen roe)
  5. borrow against the company's line of credit to get enough cash to increase advertising in all 4 geographic regions to repurchase shares of stock.

Solutions

Expert Solution

d.Repurchase shares of common stock and increase dividends payment (higher dividend payment act to reduce the amount of net income retained in the business) (retain earnings act to increase equity investment and thus dampen ROE. Share Buyback & the prospect of higher dividend payment will increase investor sentiment and thus drive the demand for company's shares.This step will increase ROE.

jeff jeffy answered 2 years ago
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