Question

In: Finance

if a company pays its all profit as a dividend and has more than 100% dividend...

if a company pays its all profit as a dividend and has more than 100% dividend payout and also struggles to pay its debts using different theories of dividend policy assess the validity of this dividend policy

Solutions

Expert Solution


Related Solutions

Gruber Corp. pays a $9 dividend on its stock. The company will maintain this dividend for...
Gruber Corp. pays a $9 dividend on its stock. The company will maintain this dividend for the next 3 years. In year 4, the dividend will increase to $10 and then grow at a constant 5 percent rate annually into perpetuity. If the required return on this stock is 10 percent, what is the current share price?
Burkhardt Corp. pays a constant $15.25 dividend on its stock. The company will maintain this dividend...
Burkhardt Corp. pays a constant $15.25 dividend on its stock. The company will maintain this dividend for the next 9 years and will then cease paying dividends forever. If the required return on this stock is 9.2 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Burnett Corp. pays a constant $7.85 dividend on its stock. The company will maintain this dividend...
Burnett Corp. pays a constant $7.85 dividend on its stock. The company will maintain this dividend for the next 12 years and will then cease paying dividends forever. If the required return on this stock is 9 percent, what is the current share price?
Burnett Corp. pays a constant $7.85 dividend on its stock. The company will maintain this dividend...
Burnett Corp. pays a constant $7.85 dividend on its stock. The company will maintain this dividend for the next 12 years and will then cease paying dividends forever. If the required return on this stock is 9 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Burnett Corp. pays a constant $23 dividend on its stock. The company will maintain this dividend...
Burnett Corp. pays a constant $23 dividend on its stock. The company will maintain this dividend for the next 6 years and will then cease paying dividends forever.    If the required return on this stock is 6 percent, what is the current share price? Multiple Choice $113.10 $118.75 $138.00 $119.88 $110.84
Burnett Corp. pays a constant $20 dividend on its stock. The company will maintain this dividend...
Burnett Corp. pays a constant $20 dividend on its stock. The company will maintain this dividend for the next 12 years and will then cease paying dividends forever.If the required return on this stock is 6 percent, what is the current share price? $167.68 $177.74 $164.32 $240.00 $176.06
Convenient Food Markets (CFM) is a chain of more than 100 convenience stores. The company has...
Convenient Food Markets (CFM) is a chain of more than 100 convenience stores. The company has faced increasing competition over the past several years, mainly because department store chains have been adding grocery departments and gas stations have been adding full-service convenience stores to their locations. As a consequence, the company has lost market share recently to competitors. The company has set a target minimum rate of return for its stores of 22%. John Nicholson is the district manager of...
Convenient Food Markets (CFM) is a chain of more than 100 convenience stores. The company has...
Convenient Food Markets (CFM) is a chain of more than 100 convenience stores. The company has faced increasing competition over the past several years, mainly because department store chains have been adding grocery departments and gas stations have been adding full-service convenience stores to their locations. As a consequence, the company has lost market share recently to competitors. The company has set a target minimum rate of return for its stores of 22%. John Nicholson is the district manager of...
a. Suppose a company currently pays an annual dividend of $3.20 on its common stock in...
a. Suppose a company currently pays an annual dividend of $3.20 on its common stock in a single annual installment, and management plans on raising this dividend by 6 percent per year indefinitely. If the required return on this stock is 12 percent, what is the current share price? b. Now suppose the company in (a) actually pays its annual dividend in equal quarterly installments; thus, the company has just paid a dividend of $.80 per share, as it has...
Twitter pays a dividend of $1. Its dividend is expected to grow by 10% for the...
Twitter pays a dividend of $1. Its dividend is expected to grow by 10% for the next 5 years. Its expected return is going to be 7% for the next 5 years. Thereafter, its dividend will grow by 5% and its expected return will be 10%. What is its price today? Show all calculations.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT