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Accounting for Corporations

Boss's angry email sends shares plunging

Boss's angry email sends shares plunging By Philip Delves Broughton in New York 12:00AM BST 06 Apr 2001 A CHIEF executive who sent his staff an email accusing them of being lazy and threatening them with the sack has seen the share price of his company plummet after his message was posted on the internet. In the three days a

Bonds and shares for opportunities

1. You have an opportunity to buy a $1,000 bond which matures in 10 years. The bond pays $30 every six months. The current market interest is 8%. What is the most you would be willing to pay for this bond? 2. In January 2000, Harold bought 100 shares of Country Homes for $37.50 per share. He sold them in January 2010 for a to

Earnings Per Common Shares of Stock

At December 31, 2011 and 2010, Miley Corp. had 180,000 shares of common stock and 10,000 shares of 5%, $100 par value cumulative preferred stock outstanding. No dividends were declared on either the preferred or common stock in 2011 or 2010. Net income for 2011 was $400,000. For 2011, earnings per common share amounted to: a)

This post addresses the Swedisn investor case below.

A Swedish investor purchased 100 shares of Microsoft on January 1, at $41 per share. The Swedish kroner to the dollar exchange rate at the time of purchase was $:Kr = 9.4173 - 9.4188. One year later, the investor received a dividend of $2 per share, and the investor then sold the shares at a price of $51 per share. The exchange

Earnings and Dividends Growth Rates

Calculate earnings and dividends growth rates for the two companies below with the following information: Kennedy Strasburg Earnings per share 2010

investment environment: How many shares of the stock can the Pangs buy?

Robert pang, a 53- year- old software engineer, and his wife, Jean, have $50,000 to invest. they will need the money at retirement 10 years. They are considering 2 investments. The first is a utility company common stock that cost $50 per share and pays dividends of $2 per share per year (a 4% dividend yield). Note that these di

How much of this $150,000 goes to the holders of preferred stock?

A corporation has 100,000 shares of 7 percent cumulative preferred stock and 40,000 shares of common stock outstanding.Par value for each is $10. no dividends were paid last year, but this year a $150,000 dividend is paid. a) how much of this $150,000 goes to the holders of preferred stock? b)Assume the same facts as in Qu

Chill Out Corporation's Next Annual Dividend & 2 Other Multi-Choice Questions

Chill Out Corporation's next annual dividend is expected to be $1.06 per share. Dividends and earnings have been growing at 6% a year and you expect this growth rate to continue indefinitely. If your required rate of return for this stock is 14%, what is the maximum price you should be willing to pay for it? a. $7.57 b.

Summerdahl Resort's common stock is currently trading at $36 a share. The stock is expected to pay a dividend of $3.00 a share at the end of the year (D? = $3.00), and the dividend is expected to grow at a constant rate of 5% a year. What is its cost of common equity?

Summerdahl Resort's common stock is currently trading at $36 a share. The stock is expected to pay a dividend of $3.00 a share at the end of the year (D? = $3.00), and the dividend is expected to grow at a constant rate of 5% a year. What is its cost of common equity?

Boehm Incorporated is expected to pay per share dividend

Boehm Incorporated is expected to pay a $1.50 per share dividend at the end of this year (i.e., D? = $1.50). The dividend is expected to grow at a constant rate of 7% a year. The required rate of return on the stock, r?, is 15%. What is the value per share of Boehm's stock?

Common stock dividends and retained earnings

Philagen Inc., ended 2012 with net profit before taxes of $211,000.00. The company is subject to a 40% tax rate and must pay $30, 600.00 in preferred stock dividends before distributing any earning on the $80,000.00 shares of common stock currently outstanding. If the firm paid common stock dividend of .82 per share, how man

Owns 100 shares of AB Corporation stock, which was purchased

Owns 100 shares of AB Corporation stock, which was purchased three years ago for $5,000. Sells all 100 shares on December 27, of the current year, for $4,000 and on January 5, of the following year, purchases 60 shares of AB Corporation stock. Recognized loss will be?

BA 341 financial management

The preferred stock of Nadine Fashions pays an annual dividend of $2.3 a share and sells for $45 a share. The tax rate is 34 percent. What is the firm's cost of preferred stock? 2.73 percent 5.93 percent 5.11 percent 4.56 percent 6.12 The common stock of Pittsburgh Steel Products has a beta of 1.52 and a sta

A firm issued a preferred stock which matures in 30 years and carries a maturity value of $45. The dividend is $4 per year over the 30 year period. The current market discount rate for this stock is 8%. What is the value of the preferred share?

Preferred stock is a hybrid security that is an equity holding but behaves more like a bond, as far as stock price movements. Preferred stock has no voting rights, and in the event of bankruptcy, preferred shareholder claims follow bondholders and precede common shareholders. Preferred dividends are contractual, in that while

Stock Comparisons

Lab X is a profitable firm that is not paying a dividend on its common stock. Jim, an analyst for Invest Today, believes that Lab X will begin paying a $2.00 per share dividend in two years and that the dividend will increase 5% thereafter. Bob, one of Jim's colleagues at the firm, is less optimistic. Bob thinks that Lab

Earnings and dividend model for value of Allen Corporation

J. Jones Investment Bankers will use a combined earnings and dividend model to determine the value of the Allen Corporation. Estimate earnings per share for the next five years are: 2008 - $3.20 2009 - 3.60 2010 - 4.10 2011 - 4.62 2012 - 5.20 a. If 40% of earnings are paid out in dividends and the discount rat

Hart Enterprises recently paid a dividend, of $1.25. It expects to have nonconstant growth of 20% for 2 years followed by a constant rate of 5% thereafter. The firm's required return is 10%. A. How far away is the terminal, or horizon, date? B. What is the firm's horizon, or terminal, value? C. What is the firm's intrinsic value today?

Hart Enterprises recently paid a dividend, of $1.25. It expects to have nonconstant growth of 20% for 2 years followed by a constant rate of 5% thereafter. The firm's required return is 10%. A. How far away is the terminal, or horizon, date? B. What is the firm's horizon, or terminal, value? C. What is the firm's

Calculate the stock price today given expected dividends

A company expects to grow its dividend by 2% each year, forever. The expected dividend in year 1 is $2.00. Investors require a 6% rate of return on this stock. What is the stock price today? $25.66 $36.23 $50.00 $22.96 $47.02 $19.27

Dividend Adjustment Model with Annual Dividend Calculations

(Dividend adjustment model) Last year's dividend for Woolridge Outfitters was $1.00. This year's earnings per share are $4.00, and Woolridge's target payout ratio is 40%. Using the dividend adjustment model, Equation (18.1), what would be this year's dividend with each of the following adjustment factors? a. 70% b. 0% c. 100%

Taxation of Corporate Dividends

Relatively recent revisions to the Code have modified the tax treatment of dividends. Put your Internet research skills to use explain these changes and their consequences. In particular, (1) what dividends are as defined by the Code; (2) what the recent changes effectively do (and how it was different from the prior app

Starbucks: Stock Price, Dividends, Capital, and Bonds

Discuss other information pertinent to Starbucks that could affect its future performance and stock price. This could include its dividend policy, its capital structure, bond ratings, experts opinions, new projects, litigation, etc.

Dividend Adjustment Model

Last year's dividend for Woolridge Outfitters was $1.00. This year's earnings per share are $4.00, and Woolridge's payout ratio is 40%. Using the dividend adjustment model shown below, what would be this year's dividend with each of the following adjustment factors? a. 70% b. 0% c. 100% dividend adjustment model

Problems involving calculations with dividends

Please help with the following problem. 3M pays quarterly cash dividends on its common stock. Suppose 3M forecasts earnings per share of $4.00 this year and $3.80, $3.20, $4.80,and $4.08 over the following four years, respectively, and believes it can maintain a long-term payout ratio of 1/4. 3M revises its dividends once

Norman's Cabinet, Inc. Equity dividends

1. Norman's Cabinet, Inc., had net income of $424,800 for its fiscal year ended October 31, 2009. During the year, the company had outstanding 53,000 shares of 9 percent $60 par value preferred stock, and 18,480 shares of common stock. 2 The balance sheet caption for common stock is: Common stock, no par value, 7,000,000