What should the firm do about dividend policy

Assignment Help Financial Management
Reference no: EM131445264

The corporation has been wildly successful, in this, the third year of operation. While operating in the social media advertising arena can be risky, the corporation has been able through strategic alliances and timely hires, to stay ahead of the profit curve. While the stock price continues to escalate since IPO, some shareholders grow weary of no dividends. A dividend would allow the firm to finally be listed on the NYSE, opening more capital potential to the firm. As is true with any technology firm, there are corporate raiders lurking hoping that management slips, so the firm can be swallowed up. Few shares are owned by the management team- only 12% of all outstanding shares. Approximately 20% of the firms shares are in treasury, not because of an under-subscription, but because the firm purchased shares for the last two years in a buyback. As the CFO of the firm, management turns to your leadership on strategic financial issues.

1) What should the firm do about dividend policy?- be specific

2) What can the firm do long-term to protect the organization from corporate raiders?

Reference no: EM131445264

Questions Cloud

How much money must the company deposit : Starlite industrie will need $2.2 million 4.5 years from now to replace some equipment. Currently, the firm has some extra cash and would like to establish a savings for his purpose. The account pays 3.6 percent interest, coumpounded annually. how mu..
Calculate the annual cash flows from fixed-payment annuity : Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $2 million and the annuity earns a guaranteed annual return of 10 percent.
What would be the exhange rate between the dollar and pound : Undre the gold standard , the price of an ounce of gold in US odallars was $20.67, will the price of that same ounce in British pounds was 3.7683. What would be the exhange rate between the dollar and the pound if the US doallar price had been $42.00..
What would be the equivalent taxable yield of this bond : A municipal bond carries a coupon rate of 6.00% and is trading at par. What would be the equivalent taxable yield of this bond to a taxpayer in a 38% tax bracket?
What should the firm do about dividend policy : The corporation has been wildly successful, in this, the third year of operation. While operating in the social media advertising arena can be risky, the corporation has been able through strategic alliances and timely hires, to stay ahead of the pro..
Calculate your monthly payments on this mortgage : You plan to purchase a $170,000 house using a 30-year mortgage obtained from your local credit union. The mortgage rate offered to you is 7.75 percent. You will make a down payment of 10 percent of the purchase price. Calculate your monthly payments ..
Project with working capital factored into the cash flow : Working capital and capital budgeting. Working capital investment is 25% of the anticipated first year sales for Wally’s Waffle House. The first-year sales are currently projected at $4,300,000. What is the internal rate of return of the ten-year pro..
Evaluate effectiveness of accounting principle guidelines : Evaluate the effectiveness of the accounting principle guidelines for determining the market value of an asset, indicating improvements to these guidelines.
What is the effective annual interest rate for an asset : What is the Effective Annual Interest Rate for an asset that is purchased on December 15, 2015 for $875 and sold 27 months later (on March 15, 2018) for $1,099? A bond pays interest on a semi-annual basis and has a coupon rate of 9%. The interest is ..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Determining the need for life insurance

Determining the Need for Life Insurance. Jake is a 27-year-old single man with no children. He has a younger sister who has a developmental disability. Both his parents are living, though neither parent is in good health. Jake has an auto loan, a $50..

  Zero coupon treasury bonds for years

On March 11, 20XX, the existing or current (spot) 1-, 2-, 3-, and 4-year zero coupon Treasury security rates were as follows: 1R1 = 0.55%, 1R2 = 1.15%, 1R3 = 1.55%, 1R4 = 1.70% Using the unbiased expectations theory, calculate the 1-year forward rate..

  Return for the government bond

Required rate of return - risk free+ (market return- t=risk free rate) and Return for the government bond - I have used the data for 10 years since the projects period is 10 years

  Exercise the option or use the spot transaction

Assume you import 1 million Euro of computer from Europe from France and you have to make the payment in Euro and pay in September. To hedge against rate uncertainty, you can buy a September option. If you buy the option, on the maturity date, the sp..

  Identify and describe a business crisis situation

Identify and describe a business crisis situation and the main leaders involved

  What is the inflation risk premium on a five year bond

Assume that expected rates of inflation over the next 5 years are 4 percent, 4 percent, 10 percent, 7 percent, and 6 percent, respectively. What is the inflation risk premium on a 5 year bond?

  How much additional short term funds will be generated

If Milton stretches its accounts payable an extra 10 days beyond the due date next year, how much additional short-term funds (that is, trade credit) will be generated?

  What is block ownership-how does affect corporate governance

Suppose you decide (as decide (as did Steve jobs and Mark Zuckerberg) to start a company. Your product is a software platform that integrates a wide range of media devices, including laptop computers, desktop computers, digital video records, and cel..

  Amount of the recorded gain or loss from retiring the bonds

On January 1, 2013, Shay issues $380,000 of 9%, 15-year bonds at a price of 97.25. Six years later, on January 1, 2019, Shay retires 30% of these bonds by buying them on the open market at 105.25. What is the amount of the recorded gain or loss from ..

  Estimate weighted-average cost of capital assuming tax rate

The total market value of Okefenokee Real Estate Company's equity is $6 million, and the total value of its debt is $4 million. The treasurer estimates that the beta of the stock currently is 1.2 and that the expected risk premium on the market is 5%..

  Employees taxable income

One of your corporate clients has approached you about whether or not its employees are required to include certain benefits provided by the corporation in their income. In particular, the corporation has inquired whether the following benefits provi..

  Income statement net of applicable income taxes

All of the following components are shown in the income statement net of applicable income taxes EXCEPT (a) gain or loss on sale of plant assets. (b) extraordinary gain or loss. (c) cumulative effect of a change in accounting principle. (d) discontin..

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