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Introduction: Facebook's Repurchase: Nathalie Moyen Applied Financial Management 1 / 6

Facebook is considering repurchasing its own shares. There are several questions that would need to be addressed in advising Facebook on this decision. These include why Facebook would repurchase shares rather than pay a dividend, where the funds for the repurchase would come from, what should guide Facebook's decisions around its capital structure, and at what price Facebook should offer to repurchase shares. The document discusses key topics like the balance sheet, capital structure tradeoffs, and valuation methods that would be relevant to advising Facebook on executing a share repurchase.

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73 views6 pages

Introduction: Facebook's Repurchase: Nathalie Moyen Applied Financial Management 1 / 6

Facebook is considering repurchasing its own shares. There are several questions that would need to be addressed in advising Facebook on this decision. These include why Facebook would repurchase shares rather than pay a dividend, where the funds for the repurchase would come from, what should guide Facebook's decisions around its capital structure, and at what price Facebook should offer to repurchase shares. The document discusses key topics like the balance sheet, capital structure tradeoffs, and valuation methods that would be relevant to advising Facebook on executing a share repurchase.

Uploaded by

aniketkaushik
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Introduction: Facebooks Repurchase

Nathalie Moyen Applied Financial Management Introduction 1/6


Suppose You Were to Advise Facebook

Operations (LHS)
1 How is Facebook doing?
2 What are some KPIs?

Financing (RHS)
1 Why is Facebook repurchasing shares?
2 Why a repurchase rather than a dividend?
3 Where does Facebook get the funds to repurchase?
4 What should guide Facebooks capital structure decisions?
5 At what price should Facebook offer to repurchase shares?

These are the types of questions we will examine throughout the


semester...
Nathalie Moyen Applied Financial Management Introduction 2/6
LHS and RHS of the Balance Sheet

LHS (Real Assets) RHS (Debt + Equity)

Nathalie Moyen Applied Financial Management Introduction 3/6


Why a Share Repurchase Rather than a Special Dividend?

Nathalie Moyen Applied Financial Management Introduction 4/6


What Should Guide Facebooks Capital Structure?

Capital Structure Trade-offs:


Benefits

Costs

Nathalie Moyen Applied Financial Management Introduction 5/6


At What Price Should Facebook Repurchase Shares?

Valuation Methods:

Nathalie Moyen Applied Financial Management Introduction 6/6

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