Explain the principal problem involved in using a dividend valuation model to value: i. companies whose operations are closely correlated with economic cycles. ii. companies that are of very large and mature. iii. companies that are quite small and are growing rapidly. Assume that all companies pay dividends.

Q: For each of the companies described here, would you expect it to have a low, medium, or high…

A: Dividend payout ratio indicate how much earning of a company is paid to shareholder as a reward in…

Q: In order to arrive at an intrinsic value for the stock of a company when using the Corporate…

A: Corporate Valuation Model:- This model is also known as the cash flow method, it helps in suggesting…

Q: Which of the following typically is true for profitability ratios? a. Growth stocks have lower price…

A: Profitability ratios are calculated to assess the company's ability to generate incomes relative to…

Q: Which of the following ways can a firm increase its dividends per share?

A: Firms can increase their dividend per share to their shareholders. When a firm increases its…

Q: Would you expect a company in a rapidly growing technological industry to have a high or low…

A: Dividend Payout ratio:   Dividend payout ratio is the ratio between total dividends and the net…

Q: Which of the following statements about earnings per share (EPS) is correct? Multiple Choice EPS is…

A: Earnings per share (EPS): The amount of net income available to each shareholder per common share…

Q: . Describe the series of steps that most firms takewhen setting dividend policy.

A: A policy that an organization form to decide the amount, time and other aspects of the dividend to…

Q: Explain the relationship between a company’s growth possibilities and its dividend policy

A: There is a systematic and tangible relationship between a company’s growth possibilities and its…

Q: 1. Dividend is a financing decision as well as distribution of earnings.  Do you agree with the…

A: Note: “Since you have asked multiple question, we will solve the first question for you. If you want…

Q: “The market capitalisation of a brand as reflected by their share price on the stock exchange is…

A: The market capitalization is the total current value of the equity in the organization. The market…

Q: The recognition that dividends are dependent on earnings, so a reliable dividend forecast is based…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: What is the lowest dividend a firm could pay? What types of firms generally pay high dividends?…

A: Dividend is not compulsory to pay, when the company earns good profits , Board of directors…

Q: According to the bird-in-the-hand-theory, how do high dividends impact company value and why?

A: The dividend is the amount that is paid to the shareholders as the return on the shares after paying…

Q: Dividend policy determines the ratio between the earnings distributed to shareholders and the…

A: Dividend policy is referred as the dividend distribution, which has the guidelines that actually…

Q: what do you think is the significance of Earnings Per Share (EPS) especially in measuring the…

A: Earnings per share or EPS is an important financial measure, which indicates the profitability of a…

Q: Write out the equation of corporate value model, and why there is a need of corporate value model…

A: The calculation of theoretical value of stock is known as stock valuation. It is important tool to…

Q: Which of the following statement is NOT a function of the stock market in a market economy? A. to…

A: Introduction : In simple words, stock market refers to the sum of buyers and sellers of stocks of…

Q: The market capitalisation of a brand as reflected by their share price on the stock exchange is…

A: The market capitalization of a firm is the entire current value of its equity. A corporation's…

Q: What are some considerations a company should take into account when establishing dividend policy?

A: there are some considerations a company should take into account when establishing a dividend policy…

Q: Dividend is a financing decision as well as distribution of earnings.  Do you agree with the…

A: Dividend is the distribution of the company’s earnings to the shareholders of the company. A…

Q: discuss the critical issues invlove in implementing the dividend growth model approach and the…

A: Critical issue with “Dividend Growth Model Approach”: Dividend Growth Model is utilized to value an…

Q: What is the principal problem involved in using a dividend valuation model to value companies whose…

A: The Dividend Discount Model (DDM) is a quantitative method of valuing a company's stock price that…

Q: investment growth

A: Stock price refers to the price at which a stock is trading in the market. It is the value that…

Q: 1. What is the company's "life cycle"? What is Multistage Growth Model? Do we assume a constant…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: How do firms use long-run planning models to help set dividend policy?

A: The term Dividend denotes that a part of company's net profit which is available for equal…

Q: s this statement true or false? Give a reason for your answer. "A company can always increase its…

A: Dividend payout ratio is a ratio that tells that how much company has paid the dividend out of the…

Q: Dividend policy and company value: You have just encountered two identical companies with identical…

A: A dividend policy is an important policy, it changes the valuation of a company.  If a company is…

Q: Which one of the following is the ultimate objective of modern financial management for a…

A: Modern financial management is referred as one of the function of an organization which is concerned…

Q: Explain why it would be difficult to use the dividend discount model (DDM) to value a new and…

A: The dividend discount model is used to find the present value of the stock by calculating the…

Q: Profits measure how well managers have run the company where the equity markets are the main source…

A:

Q: On Introduction to financial management Statement I: Profit maximization is a short-term goal. It…

A: Financial management included activities related to planning, organizing, and monitoring the…

Q: Which of the following statements accurately describes the relationship between earnings and…

A: Growth rate in earnings and dividend = ROE*Retention ratio or ROE*(1-Payout ratio) Growth rate…

Q: The recognition that dividends are dependent on earnings, so a reliable dividend forecast is based…

A: Earnings before interest and taxes (EBIT) is a common metric for determining a company's operating…

Q: Using the data for a firm shown in the following​ table attached below, calculate the cost of…

A: Dividend next year (D1) = $2.64 Growth rate (g) = 8% Current price (P0) = $44 Underpricing (u) = $2…

Q: Is a company's dividend policy important? Please explain why or why not

A: Dividend policy is concerned with financial policies that involve paying a cash payout now or paying…

Q: What comment can be made on this or what can be added? The Weighted Average Cost of Capital (WACC)…

A: WACC or the weighted average cost of capital is a very important financial metric. My comment can be…

Q: What factors fo firms consider in establishing dividend policy? Briefly describe each of them

A: Required  What factors fo firms consider in establishing dividend policy? Briefly describe each of…