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
jeff jeffy answered 1 year agoRelated 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
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...
An all equity firm pays a dividend of $1 in first year, a dividend of $2...
An all equity firm pays a dividend of $1 in first year, a
dividend
of $2 in second year which then grows at a constant rate of 5%
for the next ten years. After that, the company has promised to pay
a fixed dividend of $4 annually. If the cost of equity is 15%, what
is the share price?
Select one:
a. $20.33
b. $22.60
c. $23.25
d. $21.5
For all the following, consider the company, XYZ Inc. a. It’s preferred stock pays a dividend...
For all the following, consider the
company, XYZ Inc.
a. It’s preferred
stock pays a dividend of $1.00. If you require a return of 10
percent, what is the most you would pay for their preferred stock
today?
b.
Preferred stock is ok,
but you really want common stock because of the growth potential.
Consider that XYZ just paid a regular dividend of $4. If the
required return on equity is 20 percent, what is the most you’d pay...
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