McDonald's Shares Sell Off On Significant Capital Return Announcement

McDonald’s MCD shares are bouncing up and down after the company made major capital and restructuring announcements.

From 2014 through 2016, McDonald’s expects to return $18 billion to $20 billion to its shareholders in a combination of dividends and buybacks. Compared to the previous two-year period, this is a 10 to 20 percent increase. McDonald’s yield is currently 3.17 percent.

Re-franchising efforts are expected to increase by more than 50 percent. The fast-food giant wants to re-franchise at least 1,500 restaurants by the end of 2016, the majority of which will be done internationally.

Related: McDonald's CEO Defends Company's Marketing, Wage Scale During Shareholders' Meeting

The company also said it would analyze its general and administrative costs so that its resources are used on higher NPV projects.

The reasons for the drop in share price may be that the press release emphasized a focus on the customer. These above objectives, according to the press release, are dependent on maintaining a high level of customer satisfaction.

CFO Pete Bensen commented, “The actions we are taking to enhance long-term shareholder value fit squarely within our proven business model. Our 3-year cash return target is based on several activities including the significant free cash flow generated from our operations, as well as the use of cash proceeds from our debt additions and refranchising activity.

"Financial discipline has always been a cornerstone of McDonald's strategic plan, and we will pursue these activities while maintaining appropriate levels of financial flexibility, liquidity and access to capital for the Company and the System. Our commitment to this discipline continues to fortify our long-standing financial strength and our ability to deliver sustained profitable growth."

Shares of McDonald’s were last down 1.23 percent to $101.09.