Business development of the company essay

A

          Pillar pays dividends and uses the cash to invest in the further business development of the company. This strategy is effective in terms of the optimization of business development and organizational performance. The company invests cash into further business development that helps the company to keep growing and gain a strong position in the market. Pillar has considerable potential and benefits obtained as the result of its business operations allowing the company to develop effective business strategies and marketing policies that help the company to grow and expand its business.

B

          The book value per share was $10 because the company had 250,000 shares that were valued at $2,500,000 in 2013 which makes $10 per share. Similarly, in 2014, the company had 275,000 valued at $2,750,000 which also makes $10 per share. In such a way the book value of the company’s shares remained the same in 2013 and 2014, while the real value of the company’s shares has probably declined to take into consideration the inflation rate and the currency rate of the US dollar.

C

          My share in the company has declined in the course of the year because the company had 250,000 shares in 2013 and 275,000 shares in 2014. This means that my share declined in 2014. At the same time, the book value of shares of the company remained unchanged and comprised $10. This is why the value of my shares has declined along with my share in the company. The total number of shares of the company increased by 10% which means that my share in the company has declined respectively by 10% according to the percentage of shares issued by the company in 2014.

D

          Stock dividends are grounded on shares I own in the company. This is why dividends are not something new that I have not owned before. Nevertheless, it does not mean that I gain nothing from dividends. On the contrary, dividends help me to earn profits from the shares I own. Dividends provide me with the possibility to gain benefits along with the company as the share price grows and the company keeps progressing. In such a way, the company pays off dividends to give me my share of the benefits of the company according to my share in the company.

E

          Stock dividends provide me with an adequate profit that matches my share in the company. Cash dividends do not always match my share in the company and the current share price does not match the share price one year ago. In other words, even though the book price remains the same and comprises $10, the real price of shares has decreased because of inflation devaluation of the company’s market value, and other factors. This is why cash dividends would bring me fewer profits compared to stock dividends.

F       

          As the value of shares decreases in terms of the real price I cut back on dividends because shares of the company do not have the same value as they used to have a year ago. This is why I have to cut back dividends according to the devaluation of the real price of shares of the company. In such a way, dividends match the current value of shares.

G

          I borrow $500,000 instead of the $300,000 needed because I have to ensure that the funds I borrow will cover my needs to the full extent. Moreover, I may confront some unexpected difficulties which may need funds. If I borrow $300,000 exactly, I would be unable to cover the increased costs, if they do increase. This is why borrowing more helps me to meet my goals successfully.