Research Paper Part III

Running Head: APPLE INC 1

APPLE INC PAGE 5

Research Paper: Part II

Sonora Mosley

Columbia Southern University

Stock market exchange

Apple Inc. stock exchange market is listed on Nasdaq-GS. This company design manufactures and sells mobile devices, tablets, personal computers, wearables, and accessories globally. It sells other related and different services and offers digital content stores as well as streaming services. Its services are provided to customers, small and mid-sized businesses, and sell and deliver products to third-party applications via apps, retail and online stores, direct sales, and other cellular network carriers (Yahoo Finance, 2020). It also works with retailers, wholesalers, and resellers and collaborates with Google to establish a COVID-19 tracking system for Android and iOS devices. The average stock during this period is 123.12 dollars, and the high price was $116.12, while the lower $112.25.

Stock split

Apple's stock has initiated almost five splits since it went public. Its last time was this yea in early August. It did not provide a precise reason for this split but it’s likely that the firm believes that its high share price could prevent new investors. It has presently divided its stock four times when its shares have undergone great increases in prices (Schauer et al., 2018). While a stock split might be done to encourage investment, the split does not have an impact on the market capitalization of a firm. Existing stakeholders will own more stocks; however, each one of them is worthless, making no changes to the overall market value of the organization.

The splitting of stocks might not increase share prices directly, but they can frequently lead to increased share prices down the line. This can be through making accessible shares to investors, which increases demand, making the share price to appreciate and the overall market capitalization to increase. Apple stock has appreciated greatly since the firm's last divide. It was the first company to be listed publicly and valued at more than one trillion dollars last year.

When determining the value of a firm's share, it can be challenging to interpret how successful the industry has been according to its stock prices following a divide. The current stock divide of Apple doesn't appear to be impressive as it would have done ahead of its other four stock divides. This led to adjustments of the split figures to account for the stock splits, enabling working on return investment (Li & Wang, 2019). The adjusted stock figures of Apple acknowledge that one stock purchased during IPO would have been 56 shares. Their long-term shareholders had seen an incredible return on their investments as the split was successful and profitable, especially when it first went public.

Apple has 31.7 million fewer shares outstanding, meaning that it has to pay 104.3 million dollars in less in its whole dividend payment. The current outstanding shares are $861.74 million and the one authorized is $1.8 billion common shares. They were enabling it nearly a billion shares, which it could provide for sale or grant to workers or use for other purposes. But the issuing of authorized stock has effects on stock buybacks as it will dilute the value of outstanding shares and affect negatively.

Investment and comparison

Based on what I have evaluated, I believe it is not the right time to invest in this company; thus, I will not invest. The firm needs to first figure out a better way to use its funds or reduce its share prices to a more reasonable level. It is the best option for me not to buy shares near 30 times revenues (Macrotrends.net. 2020). Both Amazon and Apple have seen incredible appreciation in its stock price, contributing to higher valuations. Based on valuations only, Apple has little growth priced in than Amazon. This means that investors looking for value may prefer starting from there. Apple stocks have a forward price-earnings more compared to Amazon. These valuations are not the only ones important; each of the firms has a business model that can meet these high expectations.

References

Li, L., & Wang, Z. (2019). How does capital structure change product-market competitiveness? Evidence from Chinese firms. PloS one, 14(2), e0210618. Retrieved from https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0210618

Macrotrends.net. (2020). Apple Investing Activities - Other 2006-2020 | AAPL. Retrieved from https://www.macrotrends.net/stocks/charts/AAPL/apple/investing-activities-other

Schauer, B., Zielinski, B., & Kolb, K. (2018). Apple Incorporated, AAPL. UWEC. Retrieved from  https://www.indstate.edu/business/sites/business.indstate.edu/files/Docs/SMIFC2018-1-UWEC-paper.pdf

Yahoo Finance. (2020). Apple Inc. (AAPL). Retrieved from https://finance.yahoo.com/quote/AAPL?p=AAPL