Which of the following strategies can effectively boost a company's stock price?

Study for the Business Strategy Game Exam. Engage with flashcards and multiple choice questions, each question with hints and explanations. Be prepared for your exam!

Increasing dividend payments and repurchasing shares can effectively boost a company's stock price as these actions signal to investors that the company is confident about its financial health and future prospects. When a company increases its dividend payments, it typically indicates strong and stable earnings, which can attract investors seeking income. Higher dividends can also imply that the company's management believes it can sustain these payouts, which can instill trust and drive demand for the stock.

Repurchasing shares serves a dual purpose: it reduces the number of shares outstanding, which can increase earnings per share (EPS) and often leads to an increase in stock price as supply decreases. Moreover, buybacks often signal to the market that the company's shares are undervalued, prompting investors to buy in anticipation of future price increases.

Both strategies communicate a proactive approach to returning value to shareholders, which can enhance investor sentiment and lead to a higher stock price. Therefore, option C stands out as a robust strategy for companies looking to boost their stock prices.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy