Why do firms issue stock dividends

Assignment Help Finance Basics
Reference no: EM131108986

Why do firms issue stock dividends? Comment on the following statement: “I have a stock that promises to pay a 20 percent stock dividend every year, and therefore it guarantees that I will break even in 5 years.”

Reference no: EM131108986

Questions Cloud

Discuss the validity of this statement : The use of a momentum term in the weight update described in Eq. (4.41) may be considered as an approximation to the conjugate-gradient method (Battiti, 1992).
Explain the objectives of accounting for income taxes : Explain the basic principles that are applied in accounting for income taxes at the date of the financial statements to meet the objectives discussed in (a).
Develop a competitive advantage : 1. Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy 2. The goal of strategic management is to develop a competitive advantage that is permanent.
Explain the influence of environmental factors : Explain the influence of environmental factors such as emissions and health concerns on your decision. Discuss the ways in which your purchase illustrates one piece of the circular flow model of economic activity. What are the other parts?
Why do firms issue stock dividends : Why do firms issue stock dividends? Comment on the following statement: “I have a stock that promises to pay a 20 percent stock dividend every year, and therefore it guarantees that I will break even in 5 years.”
Lykins bears the risk of loss : Farmer stated that he would leave the tractor in his front yard, and Lykins agreed that an employee would pick up the tractor within a few days. On Wednesday, the tractor was stolen from Farmer's yard. Lykins asserts that Farmer is liable to pay f..
Evaluate the computation accuracy of the network : Evaluate the computation accuracy of the network by using the test data
Pretax financial income and taxable income : Prepare the income tax section of the 2012 income statement beginning with the line "Income (loss) before income taxes."
What five factors do firms consider in establishing dividend : What five factors do firms consider in establishing dividend policy? Briefly describe each of them.

Reviews

Write a Review

Finance Basics Questions & Answers

  Report on nyse and nasdaq

Write a report for a group of new stock brokers about the NYSE-Euronext and the NASDAQ. Visit both the NYSE

  Calculate degree of combined leverage

Which of the following is a correct way to calculate degree of combined leverage?

  What is the current price of the common stock

The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?

  What is the annual yield to maturity of a 10 percent

what is the annual yield to maturity of a 10 percent semi-annual coupon bond with 8 years left to maturity? its current

  How much insurance does the company carry

If a company pays an annual premium of $6,000 and the insurance company charges $40 per thousand dollars of insurance, how much insurance does the company carry?

  Long-term investment decisions

What role does the cost of capital play in the firm's long-term investment decisions? How does it relate to the firms ability to maximize shareholder wealth?

  A pending lawsuit has just been dismissed and the beta

A pending lawsuit has just been dismissed and the beta of the stock drops to 1.4. The new equilibrium price of the stock is.

  What is the security market line sml what information is

what is the security market line sml what information is developed in the capital market line analysis and then

  Will this factor change the firms decision

The after-tax cash inflows associated with this purchase are projected to amount to $250,000 per year for 15 years. Will this factor change the firm's decision about how to fund the initial investment.

  Jims stock has a risk premium of 96percent while the

jims stock has a risk premium of 9.6percent while the inflation rate is 3.1 percent and the risk-free rate is 3.8

  Find an internal communication document

Find an internal communication document

  A firm uses only debt and equity in its capital structure

a firm uses only debt and equity in its capital structure. the firms weight of equity is 75. the firms cost of equity

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