External Financing and Stock Repurchases

External Financing

We examined two important topics in finance during this unit: external financing requirements and agency conflicts. Address

the prompts below 

Include an introduction that summarizes the main points with an example.

Critically reflect on the importance of external financing requirements. What key factors must be considered when

determining external financing requirements?

Briefly describe the types of agency conflict, and provide an example of at least one of the types of agency conflict to

support your response.

Stock Repurchases

In the short article “Royal Dutch Shell Finally Delivers Big Stock Buyback, But Shares Break Support” by Aparna Narayanan

(see below), stock repurchases may produce favorable effects on key financial ratios.

External Financing

We examined two important topics in finance during this unit: external financing requirements and agency conflicts. Address the prompts below in your essay.

1)Include an introduction that summarizes the main points with an example.

2)Critically reflect on the importance of external financing requirements. What key factors must be considered when determining external financing requirements?

3)Briefly describe the types of agency conflict and provide an example of at least one of the types of agency conflict to support your response.

Your response should be at least two pages in length, not counting the title and reference pages. You are required to cite and reference at least your textbook. Use APA format to cite in-text and reference citations.

Stock Repurchases

In the short article “Royal Dutch Shell Finally Delivers Big Stock Buyback, But Shares Break Support” by Aparna Narayanan (see below), stock repurchases may produce favorable effects on key financial ratios.

Narayanan, A. (2018, July 26). Royal Dutch Shell finally delivers big stock buyback, but shares break support. Investors

Business Daily. Retrieved from https://libraryresources.columbiasouthern.edu/login?

url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=131003207&site=ehost-live&scope=site

After reading the article, write an essay that addresses the prompts below.

1)Include an introduction that summarizes the article.

2)Analyze the importance of stable dividend policies.

3)Determine reasons behind stock repurchases.

4)Analyze how individual financial metrics are specifically affected by stock repurchase plans and returns.

Should be at least two pages in length, not counting the title and reference pages. You are required to cite and reference at least your textbook and the article. Use APA format to cite in-text and reference citations.

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EBSCO Publishing Citation Format: APA 7th Edition (American Psychological Assoc.):

NOTE: Review the instructions at http://support.ebsco.com.libraryresources.columbiasouthern.edu/help/?
int=eds&lang=&feature_id=APA and make any necessary corrections before using. Pay special attention to personal
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guidelines.

References
NARAYANAN, A. (2018, July 26). Royal Dutch Shell Finally Delivers Big Stock Buyback, But Shares Break

Support. Investors Business Daily, N.PAG.

Royal Dutch Shell Finally Delivers Big Stock Buyback, But Shares Break Support
Royal Dutch Shell (RDSA) will reward patient shareholders with a massive stock buyback even as it
missed profit estimates. while ConocoPhillips (COP) narrowly beat earnings views as oil prices
recovered. Meanwhile, Dow Jones energy giants Exxon Mobil (XOM) and Chevron (CVX) report Friday.

Royal Dutch’s $25 billion share buyback program, promised by the oil major since it acquired BG Group
in 2016, signals its recovery from a severe, extended energy downturn.

“Our free cash flow outlook and the progress we have made to strengthen our balance sheet give us the
confidence to start our share buyback program,” CEO Ben van Beurden said in a statement.

On Thursday, the Anglo-Dutch company announced second-quarter profits that rang in well below
analyst estimates. Its debt load eased in the quarter. Debt ratio vs. capitalization, termed “gearing,”
declined to 23.6% in the first half of 2018 from 25.8% in the same period last year.

Buybacks are “subject to further progress with debt reduction and oil price conditions,” it said.

ConocoPhillips earned $1.09 a share excluding items, beating consensus second-quarter views by
three cents. Revenue climbed 4% to $9.24 billion, but missed expectations slightly.

Shares of Royal Dutch Shell tumbled 3.7% to 67.76 on the stock market today, diving below the 50-day
moving average. Royal Dutch stock is in a flat base with a 73.95 buy point. ConocoPhillips rose 0.4% to
71.80, closing a penny below a 71.81 buy point.

Big 2 Oil Stocks
Chevron and Exxon Mobil report Friday.

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The integrated oil giants, including Royal Dutch Shell, have been pouring more money into the booming
shale sector, especially in the Permian Basin.

Surging crude prices have fueled a rise in many oil stocks, with both Chevron and Exxon higher so far
this week.

But in recent months, the oil market has been choppy amid U.S.-Iran tensions and fears of a global
trade war.

Exxon Mobil stock rose 0.8%, moving back in buy range but in low volume. Chevron stock slipped 0.7%
as it continues to consolidate largely below the 50-day moving average.

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By APARNA NARAYANAN

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