In the past sunnyflax paid out all of its earnings as

Assignment Help Finance Basics
Reference no: EM13618659

In the past SunnyFlax paid out all of its earnings as dividends. When the stock market opened for trading today, SunnyFlax share price was $38 and earnings for the year ending today ending today are $3/ share. At the end of the day and after paying their $3 dividends, Sunnyflax surprises investors by announcing that they will cut its dividend payout in the future years from 100% to 66.67% and reinvested the retained funds. The rate of return on invested capital is expected to be 12%. If the reinvestment does not affect Sunnyflax' equity cost of capital, what is the expected share price as a consequence of this decision?

Reference no: EM13618659

Questions Cloud

The tunnel is located in boulder colorado altitude 1650 m : an intermittent wind tunnel is designed for a mach number of 4 at the test section. the tunnel operated by sucking air
What is the probability that the portion of the group who : according to the school board 48 of all the voters in the district support the refeendum. suppose a principal is
What is the max speed that the air can attain if the max : sea-level air is drawn from the atmosphere through a duct and into a vacuum tank. if the air remains a perfect gas at
A particular satellite was placed in a circular orbit about : a particular satellite was placed in a circular orbit about 145 mi above earth.a determine the orbital speed of the
In the past sunnyflax paid out all of its earnings as : in the past sunnyflax paid out all of its earnings as dividends. when the stock market opened for trading today
When air is released adiabatically from a tire the : when air is released adiabatically from a tire the temperature of the air at the nozzle exit is 37 degrees celsius
An electric motor rotating a workshop grinding wheel at a : an electric motor rotating a workshop grinding wheel at a rate of 9.80 x 101 revmin is switched off. assume the wheel
One jet is at 400 k and 100 ms and the other is at 200 k : two jets of air of equal mass flow rate mix thoroughly before entering a large reservoir. one jet is at 400 k and 100
A centrifuge in a medical laboratory rotates at an angular : a centrifuge in a medical laboratory rotates at an angular speed of 3550 revmin. when switched off it rotates through

Reviews

Write a Review

Finance Basics Questions & Answers

  Mr swansonhad recently overheard afellow member of his

mr. swansonhad recently overheard afellow member of his local business association discussing possible investments in

  Eastgate electronics is considering a new product line that

eastgate electronics is considering a new product line that would require an investment of 140000 in equipment and

  Determine the amount of the cost recovery

Janet purchased her personal residence in 2000 for $250,000, In January of 2009 she converted it to rental property. The fair market value at the time of conversion was $210,000.

  What is the stick worth today

If the required rate of return is 10%, what is the stick worth today?

  What would the cost of equity from new stock be

If the company were to issue new stock, it would incur a 14% flotation cost. What would the cost of equity from new stock be? Round your answer to two decimal places.

  A firm with a 14 wacc is evaluating two projects for this

a firm with a 14 wacc is evaluating two projects for this years capital budget. after tax cash flows including

  Which is the best alternative

A city has two alternatives for improving its sewage system. Use a 4% cost of money, which is conservative for a municipality.

  Compute the correlation coefficient for the data

compute the correlation coefficient for the data belowx values 2 1 0 3y values 4 2 8 1a -0.142b 0.429c -0.792d

  Calculate the two projests mirr

Calculate the two projests MIRR's. ARound your answers to two decimal places. Project X = %; Project Y = %. Which project has the higher MIRR?

  What will be its per-share dividend in 2009

The company had a 40% dividend payout ratio in 2008. If Bowles wants to maintain this payout ratio in 2009, what will be its per-share dividend in 2009?

  How large can the capital budget be before common stock

Clanton Company is financed 75 percent by equity and 25 percent by debt. If the firm expects to earn $30 million in net income next year and retain 40% of it, how large can the capital budget be before common stock must be sold.

  What is the yield-to-maturity of a 10-year 10 semi-annual

what is the yield-to-maturity of a 10-year 10 semi-annual coupon bond if its current price is 1135.90? assuming a 35

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