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
*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
The Shamrock Dogfood Company has conisistently paid out 40% of its earnings in dividends. The companys return on equity is 16%. What would you estimate as its dividend growth rate?
Can you try this for number 2 it is what the prof sent: The URL for .1 is still current however the 2 URL dividenddiscountmodel.com 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
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
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'
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
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
I'm not sure exactly how to get started. The more I read into it, the more ways I find to come up with solutions and they are all different. Any help would be greatly appreciated. Here is the problem. A corporation is planning to expand its business and needs $30,000,000. The company believes that a 12-year term loan can be n
Grant purchased one call on XYZ stock at an exercise price of $25. The market price of XYZ stock when Grant purchased the call was $24 a share. XYZ is currently priced at $30 a share. Grant paid $120 to buy the call. How much profit will Grant make if he exercises the option today and then sells the shares? Ignore all transactio
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
After a 5-for-1 stock split, the Strasburg Company paid a dividend of $0.75 per new share, which represents a 9% increase over last year's pre-split dividend. What was last year's dividend per share?
Can you help me get started with this assignment? Colgate-Palmolive Company has just paid an annual dividend of $.96. Analysts are predicting an 11% per year growth rate in earnings over the next five years. After then, Colgate's earnings are expected to grow at the current industry average of 5.2% per year. If Colgate's eq
Please help with the following question. Provide at least 300 words and include explanations as part of your answer. What if you received the stock dividends when the company was at a very high point market-wise and then the bottom falls out of the market?
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
The Houston Corp. needs to raise money for an addition to its plant. It will issue 300,000 shares of new common stock.
The Houston Corp. needs to raise money for an addition to its plant. It will issue 300,000 shares of new common stock. The new shares will be priced at $60 per share with an 8.5% spread on the offer price. Registration costs will be $150,000. Presently Houston Corp has earnings of $3 million and 750,000 shares outstanding. (a)
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
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 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?
3. The liabilities of Clare Company are listed below: Accounts Payable $20,000 First Mortgage bonds payable $100,000 Debentures payable $80,000 Clare Company liquidated its assets, receiving $150,000 cash. The debenture holders will receive ________ if the debentures are unsubordinated
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
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
Starbucks has 325,000 shares of cumulative preferred stock outstanding. The stock is supposed to pay $2.00 in dividends per share each quarter. The company missed the last two quarterly payments on its preferred stock. What is the total amount of dividends it must pay to the preferred shareholders next quarter if it plans to a p
Question # P2 The Detroit Slugger Bat Company needs to raise $30 million. The investment banking firm of Kaline, Horton, & Greenberg will handle the transaction. a. If stock is utilized, 1.8 million shares will be sold to the public at $16.75 per share. The corporation will receive a net price of $16 per share. What is th
1. On the day that the board of directors declares a dividend payable to common stockholders, which account in the books is DECREASED? A. cash B. dividend payable C. retained earnings D. BOTH dividend payable and retained earnings E. NONE of the above 2. On the day that the board of directors declares a dividend
The directors of Caldwell Corp. are trying to decide whether they should issue par or no par stock. They are considering three alternatives for their new stock, which they are assuming will be issued at $8 per share. The alternatives are: (A) $5 par value, (B) no par with a $1 stated value, and (C) no par, no stated value. If 60
You own a stock that will pay a dividend of $1.75. The stock currently sells for $22.46. You purchased this security 3 months ago for $20.67. If you sell this security on the ex-dividend date, tomorrow, what is your annualized (quarterly compounded) after-tax return if you expect the stock price to drop by $1.15? Assume a capita
What will be the effect of each of the alternative offering prices on the long-run market price of the shares?
Firm X has 100,000 shares of stock currently outstanding. Each share currently has a true value of $60. Suppose the firm issues 20,000 shares of new stock at the following prices: (a) $65, (b) $55, and (c) $30. The firm takes the funds raised in the issue and invests in securities (i.e., a 0 NPV project). What will be the effect
The Constant Growth Corporation (CGC) has expected earnings per share (E1) of $5. It has a history of paying cash dividends equal to 20% of earnings. The market capitalization rate for CGC's stock is 15% per year, and the expected ROE on the firm's future investments is 17% per year? Using the constant growth rate discounted div
Please help answer the following problem. Provide step by step calculations. 1. You own 1000 shares of XYZ Corp. and the company is about to pay a 25% stock dividend. The stock currently sells for $100 per share. What will be the number of shares that you hold and the total value of your equity position after the dividend is