Cash dividend pay no cash dividends pay less dividends

Assignment Help Financial Management
Reference no: EM131087608

According to the residual theory of dividends, if a firm's equity need exceeds the amount of retained earnings, the firm would borrow to pay the cash dividend sell additional stock to pay the cash dividend pay no cash dividends pay less dividends.

Reference no: EM131087608

Questions Cloud

The average accounts receivable balance : ABC Company has annual sales of $224,899 and cost of goods sold of $65,537. The average accounts receivable balance is $13,594. How many days on average does it take the firm to collect its accounts receivable? That is, what is the AR Period?
Average undergraduate accumulates about credit card debt : According to the survey of college students by Fidelity, the average undergraduate accumulates about $3,000 in credit card debt. If, instead of having to make that credit card payment, a new college graduate invested that same amount monthly in a mut..
When common stock is repurchased and retired : When common stock is repurchased and retired, the underlying motive is to delay taxes boost the stock's dividends distribute the excess cash to the owners reduce the retained earnings balance.
An increase in fixed operating costs will result in : An increase in fixed operating costs will result in
Cash dividend pay no cash dividends pay less dividends : According to the residual theory of dividends, if a firm's equity need exceeds the amount of retained earnings, the firm would borrow to pay the cash dividend sell additional stock to pay the cash dividend pay no cash dividends pay less dividends.
Banks prefer to make short term loans to finance : Banks prefer to make short term loans to finance the following:
Calculate the weighted average cost of capital : Calculate the weighted average cost of capital for Carla Computer Company. The book value of Carla’s outstanding debt is $10 million. Currently, the debt is selling in the market at 110 percent of its book value and is priced to yield 12 percent.
According to the residual theory of dividends : According to the residual theory of dividends, if a firm's equity need exceeds the amount of retained earnings, the firm would borrow to pay the cash dividend sell additional stock to pay the cash dividend pay no cash dividends pay less dividends.
Future dividends will be increasing : Miller Brothers Hardware paid an annual dividend of $1.65 per share last month. Today, the company announced that future dividends will be increasing by 3.60 percent annually. If you require a 9.6 percent rate of return, how much are you willing to p..

Reviews

Write a Review

Financial Management Questions & Answers

  Complete the income statement and balance sheet

For year one of your NAB company's Business Plan, complete the Income Statement, Cash Flow Projections, and Balance Sheet sections from the "Business Plan Financials" MS Excel template

  Values of mean return and variance for the stock fund

Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe recession 0.05 −36% −11% Mild recession 0.20 −12% 13% Normal growth 0.40 15% 4% Boom 0.35 32% 5% b. Calculate the values of mean return and v..

  Calculate the company cost of retained earnings

Blue Bayou Inc. is expected to pay a $2.50 dividend at year end (D1 = $2.50), the dividend is expected to grow at a constant rate of 5.5% a year, and the common stock currently sells for $52.50 a share. Calculate the company's cost of retained earnin..

  Example of how taking compensation personally

Explain with examples the “total returns” people receive from work. Compensation for many people is an inherently personal and emotional issue. Express your opinion and give an example of how “taking compensation personally,” can play-out on the job.

  What is the average cash conversion cycle

En-gene company has a payment cycle of 50 days collection cycle of 47 days and a production cycle of 49 days. What is the average cash conversion cycle?

  Concerning the after-tax return on the stocks

Which statement is true concerning the one-year after-tax return on the following stocks, assuming a 40% tax rate on dividends and a 20% tax rate on capital gains: Stock A is purchased for $50, offers a 5% dividend yield, and is sold for $56; stock B..

  The stock is now selling ex-rights

The Holly Corporation has a new rights offering that allows you to buy one share of stock with 4 rights and $25 per share. The stock is now selling ex-rights for $30. The price rights-on is: A. $21.00. B. $25.00. C. $30.00. D. $31.25. E. impossible t..

  Compensation to investors in form of capital appreciation

A zero coupon bond is a bond that pays no interest and is offered (and initially sells) below par. These bonds provide compensation to investors in the form of capital appreciation.

  Assume that the marginal cost of each firm is zero

Consider a two-firm industry. Firm 1 (the incumbent) chooses a level of output q1. Firm 2 (the potential entrant) observes q1 and then chooses its level of output q2. The demand for the product is P = 100 - Q, where Q is the total output sold by the ..

  Branding so undervalued given the success of companies

IBM is the most valuable B2B brand of 2014 with a brand value of $107,541 million, according to The ‘BrandZ Top 100 Most Valuable Global Brands Study commissioned by WPP and produced by Millward Brown. Why is B2B branding so undervalued given the suc..

  Annual revenue-what is the present value of the savings

Your company will generate $63,000 in annual revenue each year for the next seven years from a new information database. If the appropriate interest rate is 7.50 percent, what is the present value of the savings?

  What must the coupon rate be on the bonds

Volbeat Corporation has bonds on the market with 16.5 years to maturity, a YTM of 10.6 percent, and a current price of $942. The bonds make semi annual payments. What must the coupon rate be on the bonds?

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