Question

Response must be 300 words You are working as a graduate within the engineering department of a manufacturing and consulting focused public listed company. You and your team are working on the post-COVID recovery and how best to allocate capital. Your team has $1,000,000 in capital at their disposal. The entire department is going to have a conference call next week and you have been asked to prepare a memo for the team regarding the financial options being considered. As the accounting department will be joining your memo is to prepare the staff for the call. The accountants are expected to use terms which may not be fully understood by the greater department. So your memo will be distributed before the call or you may be asked to speak on the call to assist everyone's understanding. The memo should discuss the following:

The stock price of your company has suffered due to the economic downturn. A focus at the company may be to encourage both current and prospective shareholders. Explain one way that the company could deploy company-wide excess capital to directly incentivise these investors.

Answer 1

To :

From :

Date:

Subject: ITEMS TO BE CONSIDERED IN NEXT WEEK'S MEETING

We propose to breif the recipient of this memo regarding the matters to be discussed in the coming conference call of the department scheduled next week.

• Matters regarding post COVID recovery of the company.
• How to best allocate capital under the current circumstances, capital at disposal $1,000,000.
• The Great Lockdown has not only locked down the population in their homes but also brought down the stock prices of our company. The 2020 stock market crash has brought a major setback for our stock prices. Also the stockrally remains narrow.
• Macroeconomic, virus and political environment is still uncertain.
• Aim : How to retain the existing shareholders and earn more prospective and loyal shareholders.
• Method: We can transfer the excess capital to improve the profit and thereby improve the EPS and please the shareholders. Buy back is also an option at this point of time, we may go for it and thereby ensure the the EPS improves.