Introduction: Facebooks Repurchase

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 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...
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 LHS and RHS of the Balance Sheet

LHS (Real Assets) RHS (Debt + Equity)

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Why a Share Repurchase Rather than a Special Dividend?

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 What Should Guide Facebooks Capital Structure?

Capital Structure Trade-offs:

Benefits

Costs

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 At What Price Should Facebook Repurchase Shares?

Valuation Methods:

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