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Dividends, Stock Repurchase and Policy

Solving a Problem Involving Capital Structure & Dividend Policy

In the real world we find that dividends a) are uaually more stable than earnings b) fluctuate more widely than earnings c) tend to be a lower percentage of earnings for mature firms d) Are usually changed every year to reflect earnongs changes, and these changes are randomly higher or lower, depending on whether earnings

A capital structure and dividend policy problem

You currently own 100 shares of Toll Brothers stock which currently sells for $120 a share. The company is contemplating a 2-for-1 stock split. Which of the following best describles what your position will be after such a split takes place? a) You will have 200 shares of stock and it will trade at or near $120/share. b) Y

Residual dividend policy problem

Keane Tech has a capital budget of $1,100,000, bbut it wants to amintain a target capital structure of 50% equity and 50% debt. The company expects to pay a dividned of $250,000. If the company follows a residual dividend policy, what is its forecasted net income? $700,000 $800,000 $900,000 $1,100,000

Analyzing Statements of cash flow

Please provide your analysis on the attached problems. Please note that other students in my group have made references to post 204910 and 237047 in the brainmass library. Please include citation.

Share Repurchase

Cash $25,000 Fixed Assets $190,000 --------------------------- Total $215,000 Equity $215,000 5,000 shares of stock outstanding with a declared dividend of $1.20 per share. What if the company whats to repurchase $6,000 worth of stock? What effect will this transaction have on the equity of the company? How m

Market Value of Bonds for Hartnett Company

An insurance company purchased bonds issued by Hartnett Company two years ago. Today, Cookeres Company has begun to issue junk bonds and is using the funds to repurchase most of its existing stock. Why might the market value of those bonds held by the insurance company be affected by this action?

Dividend Policy and Maximum Overall Payout

A firm has 20 million common shares outstanding. It currently pays out $1.50 per share per year in cash dividends on its common stock. Historically, its payout ratio has ranged from 30% to 35%. Over the next five years it expects the earnings and discretionary cash flow shown in millions. a. Over the five-year period, what

Dividend policy: Maximum payout ratio

A firm has 20 million common shares outstanding. It currently pays out $1.50 per share per year in cash dividends on its common stock. Historically, its payout ratio has ranged from 30% to 35%. Over the next five years it expects the earnings and discretionary cash flow shown below in millions. a. Over the five-year period, w

Debt Ratio, Market Price, Dividend Payout Ratio and Repurchases

I need help with these questions. Thanks. 1. Which of the following statements is likely to encourage a firm to increase its debt ratio in its capital structure? a. Its sales become less stable over time. b. Its corporate tax rate declines. c. Management believes that the firm's stock is overvalued. d. Its sales become

Armada Corporation

On January 1, Armada Corporation had 95,000 shares of no-par common stock issued and outstanding.The stock has a stated value of $5 per share. During the year, the following occurred. Apr. 1 Issued 15,000 additional shares of common stock for $17 per share. June 15 Declared a cash dividend of $1 per share to stoc

Stockholder's Equity

Dear Brainmass, I am having some difficulty in understanding how to prepare the journal entries for these independent transactions. I would really appreciate the assistance when you get the chance. Thank you so much in advance for taking the time to review my post. Prepare Journal Entries for the following independent tr

Payouts and Dividends

Delta Corporation earned $2.50 per share during fiscal year 2008 and paid cash dividends of $1.00 per share. During the fiscal year that just ended on December 31, 2009, Delta earned $3.00 per share, and the firm's managers expect to earn this amount per share during fiscal years 2010 and 2011, as well. a. What is Delta's pa

Discussing the Purpose of Statement of Cash Flows

Prepare a response in which you answer: What is the purpose of the statement of cash flows? What information does it provide? Be sure to explain why statements of cash flows are important when assessing the financial strength of an organization.

Stockholder Equity: Maximum Amount of Dividends

7. Your corporation has the following stockholders equity. Common Stock at par $ 750,000 Paid in capital in excess of par 1,250,000 Retained earnings 2,500,000 Total $ 4,500,000 a. What is the maximum amount of dividends the c

Stock repurchase is figured.

Beta Industries has a net income of $2,000,000 and it has $1,000,000 shares of common stock outstanding. The company's stock currently trades @$32 a share. Beta is considering a plan in which it will use available cash to repurchase 20% of its shares in the open market. The repurchase is expected to have no effect on either net

Relationship between Net cash flows and net income?

Describe the general relationship between net income and net cash flows from operating activities for the firm. Has the buildup in plant and equipment been financed in a satisfactory manner? Briefly discuss. PG 51-53 Questions 28 & 29

Financial Statements for Landry's Restaurant

Prepare a financial statements analysis using the financial statements of Landry's Restaurants located in Appendix A of the text, Fundamentals of Financial Accounting 1st ed., by Phillips, Libby, and Libby, compute the following ratios for 2002 and 2003 to the following assignments from the e-text, Fundamentals of Financial Acco

Managerial Accounting

1750-2000 words, excluding title and references Details: As SACs corporate business financial analyst, you will be required to provide the SAC Board of Directors and executive management team with essential financial information on the management of the SAC enterprise. What are the basic financial statements you will submit to

Dividend Policy: legal limit, practical limit based on liquidity

A firm has $120,000 in stockholders' equity. Earnings for the year are $20,000 and are included in retained earnings. Forty thousand dollars is listed as common stock and the balance is in retained earnings. The firm has $250,000 in total assets and 3 percent of this value is in cash. 1. Figure legal limit on current dividend

Tapley Inc. currently has assets of $5 million, zero debt, is in the 40% federal-plus-state tax bracket, has a net income of $1 million, and pays out 40% of its earnings as dividends.

Tapley Inc. currently has assets of $5 million, zero debt, is in the 40% federal-plus-state tax bracket, has a net income of $1 million, and pays out 40% of its earnings as dividends. Net income is expected to grow at a constant rate of 5 percent per year, 200,000 shares of stock are outstanding, and the current WACC is 13.40%.

Greenwood Ethics case: cash dividend vs stock dividend

Greenwood Corporation has paid 60 consecutive quarterly cash dividends (15 years). The last 6 months have been a real cash drain on the company, however, as profit margins have been greatly narrowed by increasing competition. With a cash balance sufficient to meet only day-to-day operating needs, the president, Gil Mailor, has

P3-14 Peabody & Peabody Pro Form Balance Sheet

P3-14 Pro forma balance sheet Peabody & Peabody has 2006 sales of $10 million. It wishes to analyze expected performance and financing needs for 2008-2 years ahead. Given the following information, respond to parts a and b. (1) The percents of sales for items that vary directly with sales are as follows: Accounts receivable

Finances Pertaining to Microsoft

Pick one item below and discuss and/or explain with your own words what it is and how it applies to Microsoft. 1. Dividend policy 2. Stock buyback 3. Financial leverage 4. Earnings per share