Autozone case study
- Consider the following questions, and develop a complete discussion on the topic, using the Case : AutoZone as an example
- Part 1 (questions to address below. In paragraph style, write your paper so that anyone would be able to pick up the paper and understand your topic and position)
- How does a stock repurchase work? (use case data where possible) Why would a company seek this strategy? (Why do you think AutoZone chose this option?)
- Is the price performance directly related to the repurchase? (Support)
- Is there a better used of the cash flows being ignored? Explain
- Long Term what are your projections?
- Part 2
- Research and locate an article, or financial news report describing (2017-2019) a major company’s use of this repurchase strategy.
- Does the article support your thoughts and findings in the case?
- How is the firm performing after the repurchase check the share values for the period of time to gain knowledge of their performance, or provide EPS, ROIC comparison information.
- Can you state clearly that real value is a function of this process?
Answer preview
Part one
Organizations like Autozone prefer using share repurchases or buybacks as a significant strategy of boosting the company’s shares. Share repurchase is a financial strategy that allows a company to reinvest in itself for substantial growth (Zhang, 2005). In the process, companies manage to minimize the assets on their balance sheets and maximize their return on assets to maintain the same level of profitability.
To understand this concept better, share repurchases activities involve a company buying back its shares in the marketplace. Then, it reabsorbs the repurchased shares and reduces its outstanding shares in the…
(650 words)