Purchase Solution

Effective rate of increase in the dividends

Not what you're looking for?

Ask Custom Question

Tulia Dairy pays a $2.50 cash dividend and earns $5 per share. The cash dividend has recently been increased to $2.65 per share, and a 3 percent stock dividend has been declared. What is the effective rate of increase in the dividends for Tulia as a result of this action?

Purchase this Solution
Solution Summary

The solution explains how to calculate the effective rate of increase in the dividends after a stock dividend

Solution Preview

Let us assume that a shareholder has 100 shares. The current dividend is $2.50 per share
Total dividend ...

Purchase this Solution
Free BrainMass Quizzes
Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Operations Management

This quiz tests a student's knowledge about Operations Management

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

View More Free Quizzes
Related BrainMass Solutions

  • Coefficient of Variation, Dividend Policy

    In doing a five-year analysis of future dividends, Newell Labs, Inc., is considering the following two plans. The values represent dividends per share.

  • Discount terms; price and YTM of bond; financial st

    /(48-15) = 11.06 Effective annual rate = (1+0.02041)^11.06-1 = 25.04% 2) What is the Current Price and Yield to Maturity of a 8% semi-annual coupon bond if it has a current yield of 9.3% and matures in 10 years?

  • Effective Tax Rate on Intercompany Dividends

    91531 Effective Tax Rate on Intercompany Dividends A parent holding company sells shares in its subsidiary such that the parent now owns only 65 percent of the subsidiary and thus, the tax returns of the parent and its subsidiary can't be consolidated

  • Working capital, dividends, effective and average tax rate

    424197 DeBauge Realtors: Working capital, dividends, effective and average tax rate DeBauge Realtors, Inc., is a realty firm owned by Jeff and Kristi DeBauge. The DeBauge family owns 100% of the corporation's stock.

  • Effects on Capital Structure if Congress changed tax rates

    Thus, the effective rate is the rate on the corporate income and the rate on the dividends. The effects on capital structure if congress changed tax rates are examined. The rates are increased in dividend and capital gains.

  • Dividends and equity

    The cash dividend has recently been increased to $2.65 per share, and a 3 percent stock dividend has been declared. What is the effective rate of increase in the dividends for Tulia as a result of this action? 2.

  • Abbott Labs Bond Issues; Forecasted Prices of Capital Stock

    Question 2b With a market price of $40 per common share and an annual dividend of $2.50 with an expected increase of 5 or 10% in stock dividends, and with the expected increase in long term rates, I expect that the price of common stock will

  • How would changes in the following impact a firm's payout ratio?

    A change in the Tax Code so that both realized and unrealized capital gains in any year were taxed at the same rate as dividends Increase the payout ratio This would nullify the tax advantage of capital gains over dividends.

  • Valuing the investment options

    Quarterly dividend=D=$2 Current price of dividend=Po=$80 Quarterly return=r=D/Po=2/80=2.50% Since dividends are received once in 3 months in this case, Number of compounding in a year=m=12/3=4 Effective annual rate=(1+r)^m-1=(1+2.5%)^4-1=10.38%

View More Related Solutions