Essay: The stock of Western Digital

Sample Essay

The stock of Western Digital is currently trading at $36.95 per share and the earnings per share of the company were $3.92 in 2008 which displays phenomenal growth when compared to previous financial periods. The financial stability of the company is also reconfirmed through the income statement and balance sheet of the company. An investor would be willing to purchase shares in the company with a view of capital gains as the stock price has witnessed a significant increase but if the stock of the company is purchased with a view of earning dividends it would be quite useless as the company has neither paid any dividends in the past nor does it plan on paying out any dividends in the foreseeable future.

52.

The company does not have any outstanding bond or debentures currently as the long term debt section only includes term loans and capital lease obligations. Although there are no bonds currently issued but if the company does issue bonds in the future they would prove to be an effective investment. The decision for investing in bonds can be based on financial position of the company with respect to liquidity, profitability and debt management. The interest payout ratio of the company in terms of long term loans is also excellent and acts as a barometer for evaluating investment in bonds.

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