What is the share price of firm

Assignment Help Finance Basics
Reference no: EM131890860

The firm you are CEO if has a current period cash flow of 1.75 million and pays no dividend. The present value of the company's future cash flows is $25.0 million. The company is entirely financed with equity and there are 500,000 shares outstanding. Assume the dividend tax rate is zero.

What is the share price of your firm?

Suppose you and the board announce a plan to pay out 40 percent of the current cash flows as a dividend to its shareholders. How can a shareholder, who owns 1000 shares, achieve a zero pay-out policy on their own?

Share price = $53.50, purchase 26.87 shares

Share price = $50.00, purchase 28.81 shares

Share price = $53.50, purchase 26.17 shares

Reference no: EM131890860

Questions Cloud

What the cash flow ratios indicate about the company : Demonstrate your calculations in your post, and explain what the cash flow ratios indicate about the company - Explain what the cash flow ratios indicate
Compare a rock and a snail : Compare a rock and a snail based on the 8 characteristics that define life. Discuss some of the characteristics that fire shares with living things.
What is the irr of project : The? project's only expected cash inflow is to occur in year 7 and be equal to? $124,000. What is the IRR of this? project?
What is the expected return on portfolio : Assume you have $150,000 in a mutual fund with an expected return of 16%, $20,000 in an IRA account with an expected return of 5% and $30,000
What is the share price of firm : Suppose you and the board announce a plan to pay out 40 percent of the current cash flows as a dividend to its shareholders. How can a shareholder
Calculate the npv of the film : 1. Calculate the NPV of the film, "Cat Farm" 2. Calculate the NPV of the film, "Best Friends Forever"
Semiannual coupons is trading with yield to maturity : Suppose a seven-year, $1,000 bond with a 11.17% coupon rate and semiannual coupons is trading with a yield to maturity of 10.04%
Discuss the given topic of debate : The debates have been modified for the purpose of ensuring participation by everyone. Each debate will consist of 6 persons debating where one team.
What are the different components of the triangle : Describe this traditional triangle of epidemiology. What model is this triangle based on? What are the different components of the triangle?

Reviews

Write a Review

Finance Basics Questions & Answers

  Confidence interval estimate of the mean daily income

A Scarf Company built a new parking garage in a business district. For a random sample of 100 days, daily fees collected averaged $1,800, with a standard deviation of $500. Construct a 90% confidence interval estimate of the mean daily income this..

  How much money worth today for the lottery

The payout is the following: John gets $2.5 million todayand $2.5 million each year for the next 29 years. How much money worth today for the lottery assuming federal tax rate is 39.6%, state tax is 8% and John's discount rate is 10%?

  Determine the capitalized cost of an alternative that has a

determine the capitalized cost of analternative that has a first cost of 55000 an annual maintenance cost of 12000 and

  If the expected long run growth rate for this stock is 5

a share of common stock has just paid a dividend of 2. if the expected long run growth rate for this stock is 5 and

  Setting the marketing communication mix for a company

Discuss the factors one would consider in setting the marketing communication mix for a company. Give examples.

  What is the payback period of the ice cream cart

It will cost $2,800 to acquire a small ice cream cart. Cart cash flows are expected to be $2,000 a year for three years. After the three years, the cart is expected to be worthless as that is the expected remaining life of the cooling system. What..

  Discounted payback period method

Should you accept this project, using the discounted payback period method? Is this a good decision? Provide the six (6) steps you would utilize to determine whether or not this is a good decision.

  Herbal resources is a small but profitable producer of

herbal resources is a small but profitable producer of dietary supplements for pets. this is not a high-tech business

  Why would this manager have wanted his options backdated

From the point of view of investors in KB Home, which information problem is involved here?

  Debt help the firm achieve its eps goal

Tannenbaum;s stock sells at book value. Will trading equity for debt help the firm achieve its EPS goal, and if so, what debt level will produce the desired EPS?

  Compare and contrast the role of erp systems

Compare and contrast the role of supply chain ERP systems and advanced planning and scheduling systems in enhancing firm and supply chain competitiveness.

  Explain basic earnings and diluted earnings per share

Explain basic earnings per share, diluted earnings per share, potential ordinary shares and limitation of EPS as a performance measure.

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