Purchase Solution

Financing Corporate Growth, Dividend Policy and Agency Costs

Not what you're looking for?

Ask Custom Question

1. Compare and contrast plain growth, pure proposition of sales, economies-of-scale, industry-based and disaggregated forecasts. Provide some examples from your work setting for some or all of these types of forecasts.
2. Is there any evidence that there is an agency conflict between shareholders and managers when it comes to the payment of dividends? Justify your response.
3. Compare and contrast debt-hybrid, seasoned equity, and initial public offerings. Provide one example of each type of offering.
4. Managerial temptations can take many forms. Describe in depth an illegal financial temptation. Can corporate governance and business ethics reduce these managerial temptations? Why, or why not?

Purchase this Solution
Solution Preview

1. Plain growth is the basic and measurable increase in an economy's ability to produce services and goods. The economic growth that is displayed by many countries around the world provides a vivid example of plain growth, especially when this growth is stable and consistent over a specified period of time.

Pure proposition of sales describes the clearly defined aspects of the goods and/or services that are offered by an individual or organization to another individual or organization. Pure proposition of sales distinctly spells out the terms of the given offer a proposition as well. An example of pure proposition of sales would be a car salesman selling a car based upon the specifics of the sales agreement.

Economies of scale spell out the advantages that are obtained by an organization in respect to costs, when this organization grows in scale and scope.(Welch,I.) An example of economy of scale would be the advantages obtained by China in respect to the cost of its products as the nation and its economy grows in scale and scope.

Industry-based forecasts provide information on the probable profits that would be obtained within a given industry during a specified period of time. An example of industry-based forecasts would be the forecast of the probable probability of the auto industry within the next year.

Aggregated forecasts forecast the projected profitability of a given industry, as well as the effect of supplementary economic factors on this increased profitability.
(Welch, I. (2009). ...

Solution provided by:
Marcel Parker, MPA
Education
  • Criminal Justice, Elizabeth City State University
  • Master of Public Administration, North Carolina Central University
Recent Feedback
  • "Excellent work, from the time of my post to the time I received a response was days ahead of my requirements. "
  • "Great, Thank You for our Help!!"
  • "Excellent, thank you "
  • "Thank you"
  • "Thank you!"
Purchase this Solution
Free BrainMass Quizzes
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.

Introduction to Finance

This quiz test introductory finance topics.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

View More Free Quizzes
Related BrainMass Solutions

  • What are the Determinants of Dividend Payouts?

    Growth, Beta and Agency Costs as Determinants of Dividend payout Ratios," The Journal of Financial Research 5, pp. 249 - 259. Smith C. W., & Watts, R. L. 1992.

  • Roles of Financial Institutions in Financial Intermediation

    As the use of debt financing increases, the cost of debt and equity both increase at an increasing rate due to financial distress and agency costs. At some point, the use of more debt financing will cause the WACC to increase.

  • External Financing options for a US MNE Company

    Agency cost relative to the leveraging firm: Agency costs arise as a result of problems such a conflict of interest between the MNE's management and the shareholders.

  • Capital Structure and Growth Needs

    It leads to the premium charged by the Lenders or bondholders to cover additional costs Thus the costs arising from the different interests of shareholders and the bondholders are the agency costs of debt and lead to higher debt financing costs.

  • Dividend Policy

    35096 Dividend Policy Hello need help in solving thei problem. How should investment opportunities influence dividend policy?

  • Debt and Capital Structure: Preferred Stock

    It leads to the premium charged by the Lenders or bondholders to cover additional costs Thus the costs arising from the different interests of shareholders and the bondholders are the agency costs of debt and lead to higher debt financing costs.

  • Leverage and value of investments

    This stable dividend policy means a regular cash dividend which increases over time. This means that management believes Google has growth opportunities, but would like to share a part of its earnings to the company's stockholders.

  • Optimal Dividend Payout Ratios/Optimal Debt-to-Equity Ratios

    On the other hand, conditions favoring no or smaller dividend payouts occur when firms: (1) are in the start up to rapid growth stage in their life cycle, (2) have high investment opportunities and external financing costs, (3) have a low access to funds

  • Financial plan and cash flow statement

    Hence Dividend policy is a major responsibility of the board of directors. Thus Factors influencing dividend policy ? Growth rate ? Stability of earnings ? Return on equity capital ? Liquidity ?

  • Multiple Choice Finance Questions

    a. personal taxes b. corporate taxes c. transaction costs d. flotation costs 2. Which of the following policies is most likely to produce a zero dividend now and then?

View More Related Solutions