Purchase Solution

dividends

Not what you're looking for?

Ask Custom Question

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 per year, and the quarter dividend is one-fourth of the annual dividend. Which of the following annual dividend patterns would you recommend?

1. $2.00, $1.05, $0.85, $1.45, $1.25

2. $1.20, $1.00, $0.75, $0.95, $1.40

3. $1.00, $0.95, $0.80, $1.20, $1.02

4. $0.80. $0.80, $0.95, $1.00, $1.05

Purchase this Solution
Solution Summary

This solution helps with various problems involving calculations with dividends. Calculations are given along with explanations.

Solution Preview

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 ...

Purchase this Solution
Free BrainMass Quizzes
Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Introduction to Finance

This quiz test introductory finance topics.

View More Free Quizzes
Related BrainMass Solutions

  • Dividend Computations

    Cumulative preferred: dividends in arrears and current year's dividends must be paid before common dividends can be paid. 1.

  • Computing Dividends on Preferred Stock

    299160 Bennett Company paid cash dividends totaling $150,000 in 2009 and $75,000 in 2010. 19. Bennett Company paid cash dividends totaling $150,000 in 2009 and $75,000 in 2010. In 2011, Bennett intends to pay cash dividends of $800,000.

  • Aaron Burr Corporation: common stockholders and dividends

    Amount of preference dividends= 10%*100000=$10000/- Amount of total dividends=$88000 Less: amount of preference dividends=$10000 Amount of common stock holders dividends=$78000 (b) Assuming that total dividends declared in 2007 were $88,000, and

  • Which dividend is not defined as a distribution?

    Under the revised model business corporation act, which of the following dividends is not defined as a distribution: a) cash dividends b) property dividends c) liquidating dividends d) stock dividends d) stock dividends Under this model, stock

  • Earnings per share

    Since total preferred dividends are $100,000 so all $50,000 would go towards preferred dividends. Since the dividends are non cumulative we would take only what is declared.

  • Cash dividends

    180803 Cash Dividends Amounts $30,000 cash dividends, cash dividends payable was $8,000 and $12,000 at beginning and end of the year. What is the amount of cash for the payment of dividends during the year?

  • Dividends on preferred and common stock

    dividends on common stock can be paid.

  • Multiple choice

    Firms are usually prohibited by state law from distributing 1. 1. retained earnings as dividends. 2. 2. dividends in a year the firm has a net loss. 3. 3. assets as dividends. 4. 4. paid-in capital as dividends. 3.

  • Right or Attribute of Preferred Stocks

    a) Having a claim to dividends in excess of the annual dividend requirement if dividends on common stock exceeds dividends on preferred stock b) Having a priority claim to dividends relative to the common stock's claim to dividends c) Having a priority

  • Different Types of Dividends a Company can Pay Out?

    it would pay out more dividends.

View More Related Solutions