just wondering for a "discuss" question in general, eg discuss the director's argument, do we need to draw a conclusion on which side of the argument we favour more?
thank you in advance for helping with more questions: 2021 apr/20 i) I understand the logic that lower beta would result in higher NPV and lower required return. But wouldn’t this be a bad thing if the market is good, then the actual return is likely to be lower because it correlates less with the market? Don’t know where i saw this but share buybacks enhance share prices. I thought this would mean returning cash to the shareholders, potentially signalling that the board wants to get rid of surplus cash that isn’t generating sufficient returns. Can’t this be perceived negatively?
The IFoA define 'discuss' as 'write about it in some detail, taking into account different issues or points of view'. Generally in CB1 the marks are for the different points of view or sides of the argument, rather than for drawing a conclusion.
Because retained earnings belong to shareholders in the same way as any other share capital that shareholders may have invested in the business
