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Dividends, Stock Repurchase and Policy

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

Distribution of Retained Earnings - Axel Tires Exercise

Last year, Axel Tires retained $180,000 of the $450,000 net income it generated. This year, Axel generated net income equal to $510,000. If Axel follows the constant dividend payout ratio dividend policy, how much should be paid in dividends this year?

Market value and dividend policy

I need to understand better what is the basis for the view that a firm's total market value is invariant to its choice of dividend policy? I would like to cite three broad types of capital market imperfections that might cause the dividend policy of a firm to have an effect on the value of that firm.

General Mills (GIS), Boston Beer (SAM), and US Steel (X)

Use the annual financial statements for General Mills (GIS), Boston Beer (SAM), and US Steel (X) to find the dividend payout ratio for each company for the last three years. Why would these companies pay out a different percentage of income as dividends? Is there anything unusual about the dividends paid by US Steel? How is this

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

apply the dividend discount model:

LetÃ?¢â?¬â?¢s apply the dividend discount model: P = D1/ (r-g) A company pays a dividend today of $4, and this dividend is expected to grow each year by 4%. The discount rate is 10%. What is the market price of the stock?

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

Classifying inflows and outflows of cash/ Cash flow concepts

Classify each of the following items as an inflow ( I) or an outflow ( O) of cash, or as neither ( N) (See attachment "Classifying inflow for items") Classifying inflow and outflow of cash Items Changes Cash +100 Account payable -1,000 Note payable +500 Long-Term Debt -2,000 Inventory +200

Financial Ratios (industry Savings and loans)

Complete the (6) financial ratios and discusses the strengths and weaknesses for both businesses. Everything is prepared already, including a spreadsheet with income and balance sheet, and some non-industry (savings and loans) listed ratios. The industry specific ratios are listed with the formulas but I am desperately working

Stock Value for House of Herring, Inc.

Key financial data for House of Herring, Inc. Earnings per share for 2015: $5.50 Number of Shares outstanding: 40million Target payout ratio: 50% Planned dividend per share: $2.75 Stock price, year-end 2015: $130 House of Herring plans to pay the entire dividend early in January 2016. All corporate and personal tax

Discuss footnotes for heavy equipment manufacturing company

Please find attached financial information of heavy equipment manufacturing industry. Based on the information provided prepare footnotes, which include the following: Nature of Operations Use of Estimates Revenue Recognition Cost of Products Sold Selling, General and Administrative Expense Cash Equivalents Inves

Asset Turnover for McDonald's vs the industry; collection

See attached files. Some may find this problem a bit vague. It really takes a bit of research to determine Cost of Goods Sold then divide by Average Inventory for the Period. The information should be able to be determined through a combination of the McDonald's 10K report and utilizing yahoo finance. The answer isn't cut

Calculations for Stock and Product Prices

Please help with the following problems. 1. Problem-solving: (a) Calculate the expected future dividend per share of stock for each of the next five years for a firm that uses a 5% constant dividend growth policy and paid a dividend of $2.50 last year. (b) Using your answers to part (a), calculate the total cost of this div

Double Taxation of Corporations

Is double taxation of corporations is a good thing why or why not? Who ultimately pays that tax? What unintended consequences might it have on a corporation?

Modigliani-Miller, distributions, payout policy, planning, forecasting

Short answer questions: Explain the Modigliani-Miller dividend irrelevance proposition. Discuss the different ways in which a corporation can distribute cash to its shareholders. Elaborate on signaling with payout policy. Discuss the importance and goals of long-term financial planning. Elaborate on the advantages

Payout Policy for House of Haddock

House of Haddock has 5,000 shares outstanding and the stock price is $140. The company is expected to pay a dividend of $20 per share next year and thereafter the dividend is expected to grow indefinitely by 5% a year. The president, George Mullet, now makes a surprise announcement: He says that the company will henceforth distr

For each of the following situations, determine (1) whether the bonds sold at face value, a premium, or at a discount, and (2) whether interest expense recognized each year for the bonds was less than, equal to, or greater than the amount of interest paid on the bonds. a. Bonds with a stated rate of 10 percent were sold to yield an effective rate of 8 percent. b. Bonds with a stated rate of 7 percent were sold to yield an effective rate of 7 percent. c. Bonds with a stated rate of 6 percent were sold to yield an effective rate of 11 percent. 2. Rocky Road Company sold $5 million of six-year six percent debentures (bonds) on January 1, 2009. The bonds sold to yield an effective rate of seven percent. Interest is paid annually on December 31st. a. What is the price of the bonds? (Please show calculations clearly) b. What would be the price of the bonds if they were sold to yield a real rate of five percent?( Please show calculations clearly) 3. Lindon Processing Company has been taking bids for four new processors. Martin Steel Goldbaum Equipment has offered to sell them a processor for $29,000 each. In addition Martin would finance the transaction through a capital lease over the expected ten-year life of the processor with no money down. No mention of the size of the required year-end lease payments has been made yet, but Lindon knows that Martin will expect an eight percent return on the lease arrangement. Assume that Lindon excepts this option when answering the following questions. ( Please Include detailed calculations) a. What will be the amount of each annual year-end lease payment? Round to a whole number. b. What amount will Lindon capitalize as an asset on its balance sheet for the processors and for the lease obligation? c. What total interest amount will Lindon pay over the life of the lease for financing? d. What portion of the first payment will be attributable to interest? 4. Speedway Corporation manufactures automobile steering wheels. Selected portions of the company's recent financial statement are given below: Speedway Corporation Balance Sheet (Excerpt) December 31, 2009 Stockholder' Equity - Common stock, $1 par value, 1,000,000 shares authorized, 840,00 shares issued - $840,000 Paid-in capital in excess of par value - 3,250,000 Retained earnings - 2,125,000 Treasury stock (50,000 shares at cost) - (380,000) Total stockholders' equity - $5,835,000 Speedway Corporation Statement of Stockholders' Equity December 31, 2009 (in thousands) Com. Stock Paid-In Capital Retained Earn Treasury St Total Dec. 31,2008 $710 $2,300 $1,525 $(150) $4,385 Net income 700 700 Dividends (100) (100) Stock purchased (230) (230) Stock issued $130 $950 1,080 Dec. 31, 2009 $840 $3,250 $2,125 $(380) $5,835 a. Using the above data, what is the total contributed capital at year-end? (Show computations) b. How many shares of common stock were outstanding at year-end? (Show computations) c. What dollar amount of treasury stock did Speedway hold at year-end? d. What dollar amount of treasury stock did Speedway repurchase during the year? e. How much common stock did the company issue? f. What was the amount of dividends paid during the year? g. How much net income came from financing activities associated with shareholders' equity during the current year, excluding the effect of net income? (Show computations)

1. For each of the following situations, determine (1) whether the bonds sold at face value, a premium, or at a discount, and (2) whether interest expense recognized each year for the bonds was less than, equal to, or greater than the amount of interest paid on the bonds. a. Bonds with a stated rate of 10 percent were sold t