Question

Which of the following are effective ways to try to boost a company's stock price?

a) Strive to increase earnings per share, boost the company's dividend payout ratio to more than 100%, and increase the company's retained earnings
b) Pay off all long-term debt as rapidly as possible, strive to achieve a credit rating of at least an A, and try to boost the company's image rating above 75
c) Strive to achieve an ROE above 20%, quickly pay off all long-term debt, and keep the company's dividend payout ratio below 50% S
d) trive to increase earnings per share each year, raise the company's dividend each year (ideally by at least $.05 per share), and repurchase shares of common stock
e) Increase the company's retained earnings each year, boost spending for corporate citizenship and social responsibility, and offer a wider variety of models/styles of branded footwear

Answer 1

Effective ways to boost a company's stock price include increasing earnings per share, raising dividends responsibly, and repurchasing shares of common stock to improve financial metrics like EPS.

Step-by-step explanation:

There are several strategies companies can employ to potentially boost their stock price. One effective way is to strive to increase earnings per share (EPS), which can signal to investors that the company is becoming more profitable.

Furthermore, companies can aim to raise their dividends annually, ideally by a minimum amount such as $0.05 per share, which may attract income-focused investors and indicate financial stability and growth prospects.

It's typically advisable to maintain a dividend payout ratio that is sustainable, rather than one exceeding 100% of earnings.

Companies can also engage in stock repurchase programs, reducing the number of shares outstanding, which can increase the EPS and potentially the stock price. However, it is critical for businesses to balance these actions with maintaining a solid financial foundation and investing in future growth.