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# Dividends, Stock Repurchase and Policy

### Stock Price Following the Stock Split

Gamma Medical's stock trades at \$90 a share. The company is contemplating a 3-for-2 stock split. Assuming that the stocks split will have no effect on the total market value of its equity, what will be the company's stock price following the stock split?

### Difference between cash flows and net income

Based on your knowledge of net income from accounting, why might cash flows be different from net income.

### Prepare a "Statement of changes in Stockholders' Equity"

From the attached Balance Sheet and Income Statement prepare a "Statement of Changes In Stockholders' Equity". All accounts have normal balances, the year-end is Dec. 31, 2004) The corporation has 680,000 shares issued and outstanding at Dec 31, 2004. On May 1, 2004 the corporation sold 65,250 shares of common stock to the publi

### Residual Dividend Policy Debated

Positive NPV projects enhance shareholders' wealth. However, in some cases the payment of dividends limit the number of positive NPV projects a firm can accept. Why, then shouldn't shareholders prefer a residual dividend policy?

### Credit Policy Problem is attached as a Word Doc. You must show your work and include all Formulas used. Should the firm change its credit policy?

Credit Policy. A firm currently makes only cash sales. It estimates that allowing trade credit on terms of net 30 would increase monthly sales from 200 to 220 units per month. The price per unit is \$101 and the cost (in present value terms) is \$80. The interest rate is 1 percent per month. a. Should the firm change its c

### Residual Dividend Policy

Sheffield, Inc. predicts that earnings in the coming year will be \$20 million. There are 8 million shares, and Sheffield maintains a debt-equity ration of 1.4. A. Calculate the maximum investment funds available without issuing new equity and the increase in borrowing that goes along with it. B. Suppose the firm uses a

### Do not understand

Slater Lamp Manufacturing has an outstanding issue of preferred stock with an \$80 par value and an 11% annual dividend. a. What is the annual dividend amount (per share)? If it is paid quarterly, how much will be paid each quarter (per share)? b. If the preferred stock is noncumulative and the board of directors has passe

### Estimate the expected returns

A magazine gave the following estimates for a firm: Beta= 1.15 Dividend per share at date zero= \$3.10 Expected Dividend per share in three years from zero= \$4.10 Retention rate in three years from zero= 60% ROE in three years from zero= 15% The stock was selling for \$49. Estimate the expected returns from purc

### Rights issue , required rate of return, dividends, capital gains, maximizing shareholder's wealth, leverage, refinancing, capital structure, cross rate, triangular arbitrage, forward premium, Fisher hypothesis, purchasing power parity.

? The New Word Corporation has 1,000,000 shares outstanding at \$30/share. If the firm wishes to raise \$13.5 million at a subscription price of \$27/share, calculate the value of a right. A) \$3/right B) \$1/right C) \$2/right D) None of the above ? Company X has 100 shares outstanding. It earns \$1,000 per year and e

### Practice Problem

The following data reflect the current financial condition of the Irvine Corporation: Value of debt (Book = Market) \$ 1,000,000 Market value of equity \$ 5,257,143 Sales, last 12 months \$12,000,000 Variable operating costs (50% of sales) \$ 6,000,000 Fixed operating costs \$ 5,000,000 Tax rate, T (f

### Residual dividend policy

If a firm adheres strictly to the residual dividend policy, a sale of new common stock by the firm would suggest that a. the dividend payout ratio has remained constant. b. the dividend payout ratio is increasing. c. no dividends were paid for the year. d. the dividend payout ratio is decreasing. e. the dollar am

### Ratios: calculate solvency, liquidity, and profitability.

Using the following ratios, calculate and/or state Dillards and Nordstroms solvency, liquidity, and profitability: Current ratio Return on sales Earnings per share (EPS) Debt ratio Price earnings ratio Could you put this info in MS Excel? Below is what I had come up with on my research. Please help. Thanks. Nor

### How many units were sold in the period?

How many units were sold in the period? Which correctly describes the amount of dividend? What will the club's Income and Expenditure account show? What is the maximum dividend per share payable from this year's profits? When a shareholder sells some shares for less than he paid for them, what will happen to the shar

### Residual dividend policy for Wildcat, Inc.

Wildcat, Inc., predicts that earnings in the coming year will be \$30 million. There are 8 million shares, and Wildcat maintains a debt-equity ratio of 1.5. (a) Calculate the maximum investment funds available without issuing new equity and the increase in borrowing that goes along with it. (b) Suppose the firm uses a r

### Tyler Co: Compute earnings per share for common considering preferred dividends

At December 31, Tyler Co. has \$500,000. of \$100 par value, 8% cumulative preferred stock outstanding and \$2,000,000. of \$10. par value common stock issued. Tyler's net income for the year is \$1,000,000. Compute earnings per share of common stock for the year under the following independent situations. A. The dividend to