Question

On March 2, 2015, Best Buy co. announced that it planned to repurchase up to $1 billion of its common shares. The company also announced on that day that an increase in its quarterly dividend from $0.19 to $0.23 per share, and a one-time special dividend of $0.51 per share. The special dividend resulted from a windfall legal settlement related to manufacture of liquid crystal displays it had sold. Which method of returning capital to investors (repurchases, regular dividends, special dividends) do you think is viewed by shareholders most favorably, and why?

The previous answer doesn't make sense

Answer 1

Answer:-

Company,investors may have diverse perspectives to use this cash holding it as excess. As staying with cash won't either build esteem nor get into hands of investors.

Investor's View on (Repurchase,dividend)

• In consider profit and offer repurchase as a factor influencing enthusiasm of partner there are a few angles in light of the enthusiasm of investors.

Current Source of wage

• A few financial specialists may have this venture as just wellspring of wage with the goal that sort of speculator want to have a normal profit.
• An extraordinary profit is more invaluable for this situation as more present salary got.
• Share repurchasing as an alternative to selloff offer to get a mass measure of cash.

Expanding Value of Investment

• There are financial specialists who required to increment in long haul estimation of their venture that is share cost by organization putting resources into positive NPV ventures or for this situation a buyback increment holding intensity of residual speculators.

Expanded future Dividend

• In the wake of purchasing back offers number of offers in issued in securities exchange will lessen and compelling profit per share increments.
• This will be the enthusiasm of speculator get more stake of possession in organization without purchasing new offers through repurchase.
• In light of these hypotheses there are predominantly Three view focuses one is for Dividend,other for Repurchase lastly of Part Dividend in addition to repurchase.
• If there should be an occurrence of Dividend some incline toward Special profit of $0.51 as entirety of cash got. However, there will be an idea while standard profit to be paid and remaining cash used to share buyback.