- 1). Reward your shareholders by turning excess cash profits into dividends. Pay a small annual dividend as it creates value by increasing share purchases. Buying dividend-paying stocks also allows investors to use the dividend without touching the principal.
- 2). Price the stock so it's affordable. Announce a two-for-one stock split that gives present stockholders twice the amount of shares at the new price. A stock split can generate new stock purchases by outsiders that can grow the stockholders' portfolio as the stock's price rises.
- 3). Buy back outstanding shares of the company. Use the excess cash to purchase company shares. This brings value by reducing the available amount of shares, which in turn raises the price of the existing stock.
- 4). Restructure the company. Spin-off a division from a recent merger or a profitable subsidiary. A spin-off provides a stockholder a pro rata share of stock in the subsidiary that is distributed from the parent company.
- 5). Raise capital and bring in profits. Reduce overall debt. Maximize long-term growth over short-term gains.
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