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Corporate Finance

Corporate Finance

APPLE is only one of the multiple companies that have approved and declared a stock split, the most recent one on a 4-for-1 basis last August 28, 2020. Analyze and explain:

(i) What is a stock split;

(ii) Why do you think that APPLE has approved this stock split decision;

(iii) How has that the stock split affected APPLE’s stocks’ value;

(iv) What is the APPLE’s current dividend payout ratio;

(v) How do you think that the APPLE’s dividend payout ratio may affect to the stocks’ value.

This exercise assesses the following learning outcomes:

 (i) the evaluation of the dividend payout ratio, 

(ii) the trade-off between paying dividends and retaining the profits within the company, 

(iii) the purpose and procedure related to stock repurchases, and

 (iv) the evaluation and advice on a firm going from private to a public company.