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House of Herring plans to pay the entire dividend early in January 2016. All corporate and personal taxes were repealed in 2014.
a. Other things equal, what will be house of herring's stock price after the planned dividend payout?
b. Suppose the company cancels the dividend and announces that it will use the money saved to repurchase shares. What happens to the stock price on the announcement date? Assume that investors learn nothing about the company's prospects from the announcement. How many shares will the company need to repurchase?
c. Suppose the company increases dividends to $5.50 per share and the issues new shares to recoup the extra cash paid out as dividends. What happens to the with and ex-dividend share prices? How many shares will need to be reissued? Again, assume investors learn nothing from the announcement about House of Herring's prospects.
A 10-year bond, with a par value equaling $1,000, pays 7% annually. If similar bonds are currently yielding 6% annually, what is the market value of the bond? Use semi-annual analysis.
Use the following spot and forward bid-ask rates for the JPY/USD exchange rate to answer the following questions.
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The two year interest rate is 13.8% and the expected annual inflation rate is 6.9%. What is the expected real intest rate?
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Fixed expenses for each new edition of the book, Calculate the contribution margin for each copy of the book?
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Suppose you deposit $5,000 in an account that earns 12% compounded yearly. Calculate the account balance at the end of:
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