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Accounting for Corporations

Worldwide Inc.: What is the expected dividend Expected and the price?

41. Worldwide Inc., a large conglomerate, has decided to acquire another firm by purchasing the firm's outstanding stock from the stockholders. Analysts of the firm to be purchased are forecasting a period of 2 years of extraordinary growth (20 percent), followed by 1 year of unusual growth (10 percent), and finally a normal (s

Flotation costs; dividend policies for Crystal Cargo Inc.

(Flotation Costs and issue size) Your Firm needs to raise $10 million. Assuming that flotation costs are expected to be $15 per share, and that the market price of the stck is $120, how many shares would have to be issued? What is the dollar size of the issue? (Dividend policies) The earnings for Crystal Cargo Inc. has bee

Dividends and Firm Value: Novis Corporation

The net income of Novis Corporation is 32,000. The company has 10,000 outstanding shares and a 100 percent payout policy. The expected value of the firm one year from now is $1,545,600. The appropriate discount rate for Novis is 12 percent, and the dividend tax rate is zero. A. What is the current value of the firm assum

Class of Preferred Stock

*E15-21 (Preferred Dividends) The outstanding capital stock of Edna Millay Corporation consists of 2,000 shares of $100 par value, 8% preferred, and 5,000 shares of $50 par value common. Instructions Assuming that the company has retained earnings of $90,000, all of which is to be paid out in dividends, and that preferred di

Dividend Discount Model / Stock Valuation

Can you try this for number 2 it is what the prof sent: The URL for .1 is still current however the 2 URL is inactive and the NYSE web site for 3 has been updated and no longer has the easy links to the "trading floor" and the "anatomy of a trade." I did however find a pdf in the educational section

Determine the total and per share dividends for each class of stock for each year

A company had stock outstanding as follows during each of its first three years of operations: 2,000 shares of $10, $100 par, preferred stock and 50,000 shares of $10 par common stock. The amounts distributed as dividends are presented below. Determine the total and per share dividends for each class of stock for each year by co

Earnings and dividends

1.- Malenke's Incorporated paid a dividend (Do) of $2.00 this morning. Malenke's stockholders require a 20 percent of return. Calculate Malenke's stock price under the following scenarios: Malenke's earnings and dividends remain constant forever. Malenke's earnings and dividends grow at a rate of 10 percent forever. Malenke'

Sloan Corp. cumulative preferred stock

Question 15. At December 31, 2007 and 2008, Sloan Corp. had outstanding 9,000 shares of $100 par value 8% cumulative preferred stock and 30,000 shares of $10 par value common stock. At December 31, 2007, dividends in arrears on the preferred stock were $36,000. Cash dividends declared in 2008 totaled $135,000. What amounts we

Corporations and Dividends

Fairmount Inc., a developer of radiology equipment has stock outstanding as follows: 15,000 shares of cumulative 2%, preferred stock of $15 par, and 50,000 shares of $5 par common. During it's first four years of operation, the following amounts were distributed as dividends year1: $30,000, year 2 $42,000, year 3 $90,000, year

Acap Corp: cost of capital, dividends, current and future stock price

Suppose Acap Corp. will pay a dividend of $2.80 per share at the end of this year and $3.00 per share next year. You expect Acap's stock price to be $52.00 in two years. If Acap's cost of capital is 10%: a. What price would you be willing to pay for a share of Acap stock today, if you planned to hold the stock for two year

Fritz Corporation: Calculate Dividend per share received by common stockholders

Fritz Corporation has 800,000 shares of stock and 1,800,000 shares of common stock. The cumulative preferred stock has a stated dividend of $2.50 per share. Under normal conditions, Kreisler pays out 30% of earnings available to common stockholders; however, because of a severe recession, Fritz retained all earnings last year. T

Dividend Payments

The Price-Bubble Corporation does not currently pay dividends. You predict that dividend payments will begin in four years and that the first dividend will be $4. The dividend will grow at 12 percent thereafter. If the required rate of return is 25 percent, what is the value of the stock?

Shares outstanding

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 40,000 shares were originally issued and 5,000 were subsequently reacquired. What is the number of shares outstanding? 5,000 35,000 45,000 55,000 The charter of a corporation provides for

Advanced Federal Taxation

Complete the following schedule for each case. Assume the shareholders have ample basis in the stock investment. Accumulated Current Cash Distributions Dividend Return of E&P Beginning E&P All on last day Income Capital Of Year of Year a) $1

Stocks/Market Value: Compute highest price and current dividend

1) Auto After Accident (AAA) has paid a constant $1.50 per share dividend to its common stockholders for the past 25 years. AAA expects to continue this policy for the next two years, and then begin to increase the dividend at a constant rate equal to 2 percent per year into perpetuity. Investors require a 12 percent rate of ret

Albright Motors: calculate dividend constant growth rate

Albright Motors is expected to pay a year-end dividend of $3.00 a share (D1 = $3.00). The stock currently sells for $30 a share. The required (and expected) rate of return on the stock is 16 percent. If the dividend is expected to grow at a constant rate, g, what is g?

Calculate number of shares given prospective dividend amounts

You own $157,947.72 of Big Bucks Corp. stock. A year from now you expect a dividend of $1.00, $1.25 for the next two years and $1.35 for years four and five. At the end of year five you sell you stock for $45.78. Your dividends are taxed at 28% and your capital gains are taxed at 15%. You are expecting to earn 6% per year on

Calculate stock price based on dividend scenarios

I need help with calculating stock price Problem A In 1 year, a stock is expected to pay a $2.11 dividend and be priced at $50 per share. What is the stock's price today if the required rate of return on the stock is 8%? Problem B You expect a stock to pay a dividend of $1.59 and be priced at $38 in 1 year. a. Wh

Wasco Company: dividend growth rate and ROR calculation

Wasco Company's earnings and common stock dividends have been growing at an annual rate of 6.0% over the past several years. The firm currently (t=0) pays and annual dividend of $2.00. a) Assuming that Wasco's common stock dividends continue to grow at the historical rate for the foreseeable future, what is the value of the c

Dividend: Calculate dividend for year 4

Firm X paid an annual dividend of $1.85 per share last year. Management just announced that future dividends will increase by 3 percent annually. What is the amount of the expected dividend in year 4? 1. 1.96 2. 1.91 3. 2.02 4. 2.08 5. 2.14

Compute the present value of a Stock based on dividend payments

Firm X is expected to pay its first annual dividend 5 years from now. That payment will be $3.10 a share. Starting in year 6, the company will increase the dividend by 2 percent per year. The required return is 15 percent. What is the value of this stock today? 1. $11.86 2. $12.09 3. $13.63 4. $14.66 5. $15.71