Layout References Mailings Review View Help Soda PDF CreatorTell me what you wan
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Layout References Mailings Review View Help Soda PDF CreatorTell me what you want aBbCcDc AaBbCcDc AaBbC AaBb Normal 1 No Spac.... Heading 1 Headi x, X aragraph Styles 1. What is the main, "high class" problem which Apple management must address? a Generating excessive cash is a sign of business success, so why is having it a problem? Generating too much cash (more profits than they can re-invest) 2. Should Apple give Einhorn and their largest shareholders what they want and return most of the $137-billion in cash to shareholders rather than let it sit unused? If no, why? If your answer is yes, how much and through what method? Apple should give Einhorn and to the largest shareholders what they want and instead of letting the money uaused it can be issued in the form of a dividend and ean be used some of all of the 137 billion Or, should Apple keep most of its unused cash to invest in new technologies and to deal with uncertainties in their markets? lf no, why? If your answer is yes, how should they treat the 35% of their cash held overseas and subject to repatriation tax? Apple needs to keep most of the unused cash to continue investing in new technologies. Based on tax law, What is the best course of action that will please shareholders, but also leave the a 3. a- b. 4. company with sufficient investment capital to innovate? a. What role does financial forecasting play in this decision?Explanation / Answer
1. The high class problem which the organization A is facing is the generation of the huge amount of revenue and making high profits. Since the target audience of the organization is high end market and they have customized products for these high end customers, this organization has become the market leader and also has higher profit generation when considering its competitors.
This huge profit generation of the organization which is more than enough to reinvest can be considered as an issue for the organization. When there is a huge profit generation may arguments can arise from the share holders. The share holder management will become a difficult task. Even though the share holders are given with the shares or dividends as per the policies and procedures, they can expect when the degree of profit margin increases continuously. This will put the organization into a dilemma situation.
2. The unused amount of $137 billion should not be completely given to the share holders. For making the share holders satisfied and also for effective share holder management the organization can provide a part of it to the share holders in the form of dividends, gifts, etc. Sharing the whole amount cannot be wise practices as the share holders can anytime withdraw their shares. The organizations should focus on making the share holders loyal with the profit amount and rest can be kept unused.
3. The organization can make a part of the used money for the innovation and to deal with other uncertainties. The business environment is prone to the uncertainties and the organization like A should make sure that they have sufficient funds to deal with these uncertainties. When considering the repatriation tax and the overseas fund it is associated with high degree of uncertainly. Hence it is essential that it should keep a part of it profit to maintain such uncertainties.
4. Here considering the given case of high profit generation as the challenge or problem, one thing the organization A can practice is to implement an effective share holder management system. If they are informed or educated about the relevance of keeping the part of the profit for the maintenance of uncertainty and for the innovation they can get satisfied and can allow leaving such a huge amount.
The financial forecasting statement is an effective tool which can make the share holder convinced and satisfied. This statement provides statistical reports to the share holders about the future objectives and growth of the organization utilizing the current capital funds. This can make them aware about the relevance of unused funds for the organization and hence can allow or the same.
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