Explore BrainMass

Dividends, Stock Repurchase and Policy

Dividend Distribution Policy

How should a firm determine its dividend distribution policy? Discuss three different viewpoints (management, stockholders, and lenders). One paragraph for how to determine a firm's dividend distribution policy. And then one paragraph for each of the three viewpoints: Management, stockholders, and lenders). Brief would be o

Homework Assistance

Corporate governance has become increasingly important over the years. The Sarbanes-Oxley (SOX) Act was enacted to improve transparency in financial accounting and to prevent fraud. Which of the following is correct? a) fraud has not occurred since enactment of SOX b) SOX has not increased auditing costs c)government a


There are various stakeholders in an organization. The two key stakeholders are the customers and the stockholders. Some financial managers believe that the customer is always right and an organization must do everything possible to win customer delight, thereby gaining a high market share and, subsequently, investor confidence.

Basic financial terms and APT 2-factor models

I have some practice work to complete and I have no idea how to do it. This is in preparation for an exam later. I am doing the practice work in my chapters and need some help understanding. The questions are regarding basic financial terms and an APT 2-factor model.

Cost of Equity using the Dividend Growth Model

I need help understanding the steps of how you go about finding the cost of equity using the dividend growth model for You do not have to do any calculations; just explain how you would go about doing these calculations and explain what kind of additional information you might need.

Ratio calculations - balance sheet

Access the information contained in your selected organization's balance sheet and income statement to calculate the following: Liquidity ratios * Current ratio * Acid-test, or quick, ratio * Receivables turnover * Inventory turnover Profitability ratios o Asset turnover o Profit margin o Re

Calculating the Profitability and Liquidity Ratios of Companies

Taking the example of financial statements of any existing company for any two years, perform a ratio analysis using profitability ratios and liquidity ratios. After the calculations of the ratios analyse and comment on your findings of ratios about the profitability and liquidity position of that company. Identify the problem a

Current Vs. Noncurrent Asset Or Liability

-What differentiates a current asset or liability from a noncurrent asset or liability? -Why are accounts receivable listed before inventory on the balance sheet? -Explain what effect the payment of dividends has on net worth? -Explain what effect the repurchase of stock from shareholders has on net worth?

Wyatt Oil: calculating earnings per share (EPS) and current stock price

Wyatt Oil, an all-equity financed firm, has just reported EPS of $4.00 per share. Despite an economic downturn, Wyatt is confident regarding its current investment opportunities, but due to the current financial crisis, Wyatt does not wish to fund these investments externally. Wyatt's board has therefore decided to suspend its s

Compare Dividends versus Stock Repurchases

I need assistance analyzing Dividends versus Stock Repurchases of shareholders distribution. What are some of the differences between Dividends versus Stock Repurchases and which one companies/organizations prefer? What are some of the advantages/disadvantages of having each?

Dividend Policy and Optimal Level of Debt

Modigliani and Miller have postulated that dividend policy is basically irrelevant in that if a firm is growing (share value would demonstrate this) then an internal dividend is created and the investor may sell shares to capture this dividend. 1. Do you agree with this statement? Why or why not? 2. What difference might it

A Company's Dividend Policy

Question: Present your own company's dividend policy or research a publicly-held company's dividend policy and summarize your findings. Include whether the company has changed its policy in the last few years. Give your opinion as to why management decided on its particular policy, including market and financial considerations t

Independent Case for Common Stocks

In each of the following independent cases, it is assumed that the corporation has $400,000 of 6% preferred stock and $1,600,000 of common stock outstanding, each having a par value of $10. No dividends have been declared for 2009 and 2010. (a) As of 12/31/11, it is desired to distribute $250,000 in dividends. How much will the

Prepare a statement of cash flows for

I need assistance preparing a cash flow statement. If you can view it, the attachment presents the following information much clearer. Comparative financial statements for, Inc. follow: 2012 | 2011 Cash: $ 9 | $ 15 Accounts: Receivable 340 | 240 Inventory: 125 |175 Prepaid Insurance: 10 | 6 Property, Pl

Residual Dividend Policy and Borrowing Money to Pay Dividends

A) Discuss the pros and cons of having the directors' formally announce what a firm's dividend policy will be in the future. B) Would it ever be rational for a firm to borrow money in order to pay dividends? Why or why not? C) One position expressed in the financial literature is that firms set their dividends as a resi

Calculate the stock dividend shares and cash dividend amounts.

Assume that you own 3,000 shares of Blueco, Inc.'s common stock and that you currently receive cash dividends of $.42 per share per year. a. If Blueco, Inc., declared a 5% stock dividend, how many shares of common stock would you receive as a dividend? b. Calculate the cash dividend per share amount to be paid after the

Computing Equity

See attached for the right format. The shareholders' equity section of the balance sheet of TNL systems Inc. included the following accounts at December 31, 2010: Shareholders' equity $ in Million Common stock, 240 million shares at $1 pare $240 Paid-in-capital - excess of par 1,680 Paid-in capital - share repurchase 1

Last Chance Securities Situation

Last Chance Securities Situation: The IT director opened the department staff meeting today by saying, "I've got some good news and some bad news. The good news is that management approved the payroll system project this morning. The new system will reduce clerical time and errors, improve morale in the payroll department, an

Dow Steel Corporation basic and diluted earnings per share

On December 31, 2010, Dow Steel Corporation had 800,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 5% common stock dividend on May 15 and paid cash dividends of $400,000 and $75,000 to common and preferred shareholders, respectively, on Dece

Debt Outstanding and Value of a Company

Answer 1 Net income per share $3.80 Last dividend (Do) $1.71 Growth rate (g) 8% Discount rate (Rate of Return) 13% Rate of return = Expected dividend + Growth rate Current stock price Ans a: Projected Net income for next year $4.10 Projected Dividend at 45% $1.85

Analysis: Issue of Stock, Treasury Stock, and Dividends

What did you find to be the most challenging part of this problems? Explain why. Rolman Corporation is authorized to issue 1,000,000 shares of $5 par value common stock. In its first year the company has the following stock transactions. Jan. 10 Issued 400,000 shares of stock at $8 per share. Sept. 1 Purchased 10,000 share

Dividend Policy and Cap Structures

1. What is an event study designed to test? 2. What role does par value play in the pricing and sale of common stock by the issuing corporation? Why do most firms assign relatively low par values to their shares? 3. How does the signaling model of financial structure differ from the pecking-order model with respect to the assu

Strong Correlation of Earnings at Starbucks

1. Look a most recent yr, what is amount of total assets on bal sheet? what %is fixed assets, such as plant &equip? what % is current assets? how much has the company grown over the years shown? 2.Does Starbucks have very much long-term debt? what are the chief ways Starbucks has financed assets? 3. Looking @ statement of cash

Distributions to Shareholders

A) List and briefly discuss two motivations that would lead a firm to engage in a stock repurchase versus a straight cash dividend. B) Briefly describe the implications of the tradeoff between dividends and free cash flow retention. C) Explain this statement: Even though both the Constant Dividend Payout theory of divide