Stock valuation and Bond Issuance Title Student Institution Stock valuation Part B. The decrease or increase in dividend per share has an impact on the shareholders' stock value. The company increased the dividend share by 1.75 which consequently increased dividend yield in all the years. Cash dividend per share also increased. The shareholders' value is determined by the dividend policy that managers choose to apply (Kapoor 2009). Most companies entirely rely on the dividend documentation in declaring the dividends to be paid to shareholders (Nissim & Ziv 2001). A company that needs to utilize resources available from external investors will consider applying favorable dividend policies to attract the investors. Home depot's major intention is to increase the shareholders' value so as to maximize it to generate more profits. Since the company has increased the dividend per share most investors will company may run bankrupt if the interest becomes high and the company has to pay the bondholders large sums of money that will paralyze the activities of the company. The financial data obtained from Home depot reveal that the company has issued enough bonds that will help it cater for its needs. ReferencesBaker M. R. Greenwood and J. Wurgler (2003) “The maturity of debt issues and predictable variation in bond returns” Journal of Financial Economics 70 261–291. Hussainey K. Mgbame C. O. & Chijoke Mgbame A. M. (2011). Dividend Policy and Share Price Volatility: UK Evidence. Journal of Risk Finance 12(1) 57 68.Kapoor S. (2009). Impact of Dividend policy on Shareholders‟ Value: A study of Indian Firms Jaypee Institute of Information Technology Noida Indi Nissim D. and Ziv A. (2001). Dividend Changes and Future Profitability Journal of Finance 56 2111-2133. [...]
Prompt: Calculate stock and bond valuations for Home Depot Inc. and use the results to support your explanations of shareholder value and increasing capital. Assess the company’s dividend policies and bond issuance policies in your explanations. Complete your calculations on Excel Sheet. Guidelines for Submission: Your paper must be submitted as a 3- to 4-page Microsoft Word document, not including your calculations, which should be completed in the Final Project Student Workbook. Use double spacing, 12-point Times New Roman font, and one-inch margins. Sources should be cited according APA Style. Submit your calculations on the designated tab of the Final Project Student Workbook and your supporting explanations as a Microsoft Word document.