Based on dividend growth model-price of stock will constant

Assignment Help Financial Management
Reference no: EM13948820

1. Based on the dividend growth model, the price of a stock will remain constant if the dividend is cut, provided that the:

A. required return on the stock is proportionately increased.

B. growth rate in dividends remains constant.

C. reduction is offset by an increase in the growth rate.

D. growth rate is decreased by the percent decrease in the dividend.

2. Which one of these statements is correct?

A. Dividends tend to fluctuate in direct relation to changes in annual earnings.

B. Managers are less concerned with the change in the dividend than with the actual amount of the dividend.

C. Managers tend to avoid smooth dividends as they don't signal the firm's most recent successes.

D. Managers tend to only increase dividends when they believe the increased amount can be

Reference no: EM13948820

Questions Cloud

Determine the maximum angular velocity : The wheel is made from a 5-kg thin ring and two 2-kg slender rods. If the torsional spring attached to the wheel's center has a stiffness k= 2 N # m>rad, and the wheel is rotated until the torque M = 25 N # m is developed, determine the maximum angu..
What is the planned value of the entire project : What is the planned value of the entire project - What is the rate of performance (RP) for each task? Using the RPs obtained, calculate the Earned Value (EV), Schedule Variance (SV), Cost Performance Index (CPI), and Schedule Performance Index (SPI..
What are other inverse relationships can identify associated : An inverse relationship that was identified is that as the number of treatments increased, the existence of the cancer decreased. What are other inverse relationships you can identify associated with this study?
How these principles helped the group or team succeed : Think about a positive experience when you worked in a group or team and identify the principles that were presented in the articles that were exhibited by your group or team. Explain how these principles helped the group or team succeed
Based on dividend growth model-price of stock will constant : Based on the dividend growth model, the price of a stock will remain constant if the dividend is cut, provided that the: Dividends tend to fluctuate in direct relation to changes in annual earnings. Managers are less concerned with the change in the ..
Problems legibly on a separate piece of paper : Please answer the following problems legibly on a separate piece of paper. List any other members of the class you worked with on this assignment. You will not be penalized for listing classmates' names, rather, group-work is encouraged. Remember ..
Determine the fixed overhead spending variance : Determine the fixed overhead spending variance. Determine the variable overhead spending variance. Determine the standard hours allowed per unit of product.
Smooth inner surface of a hemispherical bowl : The 500-g rod AB rests along the smooth inner surface of a hemispherical bowl. If the rod is released from rest from the position shown, determine its angular velocity at the instant it swings downward and becomes horizontal.
Fixed assets and capital expenditures first to recognize : What is examples free cash flow and how can a company can use its free cash flow? Does a company have to pay off its fixed assets and capital expenditures first to recognize or have free cash flow available?

Reviews

Write a Review

Financial Management Questions & Answers

  Number of periods of a single payment

If you deposit money today in an account that pays 8.5% annual interest, how long will it take to double your money? Round your answer to the nearest whole number

  Diversification occurs when stocks with low correlations

Diversification occurs when stocks with low correlations of returns are placed together in a portfolio. Identify at least one type of firm that might exhibit low correlations of returns with the overall stock market? Explain why the correlations of t..

  What is the expected forward exchange rate one year

The South Korean multinational manufacturing firm, Nam Sung Industries, is debating whether to invest in a 2-year project in the United States. The projects expected dollar cash flows consist of an initial investment of $1 million with cash inflows o..

  What is the companys degree of operating leverage

The following is from Alsatia Corporation's financial statement information for last month: The company has no beginning or ending inventories and produced and sold 10,000 units during the month. What is the company's break-even in units? How many un..

  The standard deviation variance and coefficient of

1.the standard deviation variance and coefficient of variation of the daily returns for the portfolio must be

  Explain investor purchasing the rights to royalties

Royalty payments arrive once per year, starting one year from now. In the first year, the author expects $400,000 in royalties, followed by $300,000, then $100,000, then $10,000 in the three subsequent years.

  Return on total assets

The Jordan Company has return on total assets of 13%, and the debt-equity ratio is 0.65. What is Jordan’s ROE?

  What is the standard deviation of the rate of return

A project has a 0.78 chance of doubling your investment in a year and a 0.22 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment?

  Global company traded in the capital markets

How do you think that most businesses (such as Dell computers -- starting in a college dorm room to ultimately becoming a global company traded in the capital markets.) are first financed as a start-up company?

  Stated or coupon rate

What would you pay for a $200,000 bond that matures in 10 years and pays 8% interest (stated or coupon rate) a year if you wanted to earn a yield of 6% (market rate)? Please show work.

  What does the acronym camels refer to

What does the acronym CAMELS refer to in commercial bank examinations? What are the most important facets of an examination?

  What is the corporations marginal tax rate

A corporation’s pretax net income of $1,000,000 is taxable based on 30% of the first $300,000, 35% of the next $300,000, and 40% of the balance: What is the corporation’s average tax rate? What is the corporation’s marginal tax rate?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd