1. Explain how the use of leverage can increase shareholder’s wealth.
2. Leverage can also impact you in your personal life. Explain how you can use it to your advantage.
3. In theory, what happens to the shareholder’s worth before and after he/she receives a dividend from the company.
4. What are the advantages of stock repurchases versus paying dividends?
5. What is the impact of a stock split on the value of a corporation? Why do companies do stock splits?
6. What is the difference between a stock dividend and a stock split?
7. If a company is highly leveraged from an operating standpoint is it more likely or less likely to use financial leverage? Why or why not?