f mining firms increase their dividends to such an extent that it amounts to returning the money shareholders had invested, what does this signal about the prospects of the mining firm?
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: Given the current scenario COVID 19 and its impact on Cement sector in the near future, what are the…
A:
Q: Discuss the effects of increasing the leverage of a firm to pay generous dividends to stockholders…
A: The Leveraged is the utilization of an above-typical measure of obligation, instead of value or…
Q: Assuming that the net sales and profit remain the same, a company's return on investment would * A O…
A:
Q: increasing the leverage of a firm to pay generous dividends to stockholders or to pay and high…
A: The business risks, the leverage , trade-off theory, financial risk and distress, debt-equity ratio,…
Q: A company hired you as a consultant to help estimate its cost of capital. You have obtained the…
A: The cost of equity can be estimated with the help of dividend discount model
Q: How is the wealth of a firm’s shareholders/owners measured by? Group of answer choices a)…
A: The objective of financial management is to maximize the wealth of shareholders, that is maximize…
Q: When the company is working at full capacity, the assets in the AFN equation is the total assets…
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…
Q: The firm's equity multiplier measures: O a. the value of assets held per dollar of shareholder…
A: Equity multiplier is also referred to as leverage ratio or financial leverage and indicates that a…
Q: The investment banks collect money from public, because O a. Business sells products. O b. Business…
A: Investment bank is referred as the bridge between large enterprises and investors. It aims to…
Q: One major component of Equity is Contributed Capital. What does Contributed Capital represent? Group…
A: The question is related Contributed Capital. Contributed Capital is the paid up capital is the…
Q: One major component of Equity is Retained Earnings. What does Retained Earnings represent? Group of…
A: Retained earnings are undistributed profits of the company and the same is retained for future…
Q: suppose a company's return on invested capital is less than its wacc. what happens to the value of…
A: Return on invested capital (ROIC) is defined as an amount of the funds, which used to make by the…
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: Except for one of the following the constant dividend growth model is useful to corporate managers…
A: The Constant growth in dividends model used to find out the intrinsic value of the company
Q: Suppose a company’s return on invested capital is less than its WACC. What happens to the value of…
A: Weighted Average Cost of Capital (WACC) is the rate at which the company is willing to pay to its…
Q: Suppose a company’s return on invested capital is less than itsWACC. What happens to the value of…
A: When the company’s ROIC is below the WACC, it indicates that the value is destroyed because the…
Q: ____________ is a short-term goal. It can be achieved at the expense of the firm and its…
A: Short term goals of the business means those objectives or goals which needs to be completed or…
Q: Which of the following situation in which the quality of the company’s pay-out to shareholders may…
A: A dividend is an amount that is paid to the shareholders on their investment. It is declared out of…
Q: a business has 1 million at its disposaland managers feel that this could either be investedin new…
A: Fisher's Separation Theorem is an economic theory that holds that, in the presence of efficient…
Q: Financial leverage: A. increases as the net working capital increases. B. is equal to the market…
A: Financial Leverage refers to making a firm levered by increasing firm's exposure with debt capital.…
Q: Explain the principal problem involved in using a dividend valuation model to value: i. companies…
A: Dividend price approach the cost of equity capital shall be the rate of the expected rate of…
Q: Discuss the real-world factors that would encourage firms to follow a high dividend policy.
A: Company is earning profit every year mostly which will be divided into two ways. Firstly, the…
Q: The suitable model to value a firm that has consistent earnings growth, but varies how it pays out…
A: Total Payout model If you want to value a firm that has consistent earnings grow, but varies how it…
Q: Which is CORRECT? O Agency costs rise with the increases in the employee ownerships of that firm O A…
A: The agent is the person that acts on behalf of principal and every action shall be in benefit of…
Q: Which of the following is true. The firm’s ultimate financial goal is to maximize its revenues…
A: Financial goal: The main goal of the firm is to maximize the shareholder's wealth and maximize the…
Q: a business has 1 million at its disposal and managers feel that this could either be invested in new…
A: Fisher's Separation Theorem seems to be an economic theory that says that, in the presence of…
Q: m's asset furnover measures: how efficiently the firm is utilizing its assets to generate sales. the…
A: Assets turnover ratio is sales divided by assets required for sales.
Q: In times of crisis companies are often seen to be paying stable dividends. The question however is,…
A: Introduction: Dividend is a part of profits which is distributed among its shareholders. In the…
Q: Which of the following is true. The firm's ultimate financial goal is to maximize its net income…
A: A firm's ultimate financial goal is following
Q: A firm’s value depends on its expected free cash flow and its cost of capital. Distributions made in…
A: (1) The optimal distribution policy aims towards maximizing the organisation's value that is…
Q: Considering each action independently and holding other things constant, which of the following…
A: Based on the above questions we need to answer the correct answer
Q: It is said that one of the goals of a company is wealth maximization. Whose wealth does a firm wants…
A: Wealth maximization : In simple words, wealth maximization refers to the phenomenon under which the…
Q: If a company sells new shares of stock to raise money, this will result in a ____ to the contributed…
A: The contributed capital by selling new stock is a method of raising finance for the business entity.…
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: In case you retain huge amount of profit of your company for long term investment, what financial…
A: Given that the company retained a huge amount of profit for long term investment.
Q: 1. Answer the following questions for the Mason brothers. a) How are paid-in-capital and retained…
A: Stockholders’ equity is the measure of assets staying in a business after the sum total of the…
Q: 1. The primary goal for a firm's financial managers is to: A. Maximize the firm's reported net…
A:
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: Which question reflects a decision regarding working capital management? Select one: a. Should…
A: Option "b" and "d" are not correct because the company invest in fixed assets by raising funds…
If mining firms increase their dividends to such an extent that it amounts to returning the money shareholders had invested, what does this signal about the prospects of the mining firm?
Step by step
Solved in 2 steps
- In case you retain huge amount of profit of your company for long term investment, what financial decision do you take – to pay high cash dividend? Or to issue bonus share (stock dividend)? And explain why?In the extractive industries, businesses may pay dividendsin excess of net income. What is the maximumpermissible? How can this practice be justified?What rate do investors use to discount the capital gains and cash flows of firms?
- How do flotation costs affect the cost of capital?Are these costs about the same for each of thethree capital components? How do they change asthe firm raises larger and larger amounts of capital,and how do flotation costs affect the way a company raises capital from year to year?How can the fundamental price of a firm contribute to the wealth maximization of a firm?It is said that one of the goals of a company is wealth maximization. Whose wealth does a firm wants to enhance in wealth maximization? (answer: the firm's stockholders) Why is the answer stockholders?
- What must a company do in the long run to be able to provide a return to investors and creditors?Suppose a company’s return on invested capital is less than itsWACC. What happens to the value of operations if the salesgrowth rate increases? Explain your answer.Which question reflects a decision regarding working capital management? Select one: a. Should the company issue new shares or borrow money? b. Should the company replace its older equipment with a new equipment in order to increase sales? c. What is the maximum amount of accounts receivable that the company should have at a particular time? d. How much should the company borrow to buy a new machine?
- suppose a company's return on invested capital is less than its wacc. what happens to the value of operations if the sales growth increases? Explain your answerSuppose a company’s return on invested capital is less than itsWACC. What happens to the value of operations if the salesgrowth rate increases?Which is easier to calculate directly, the expected rate of return on the assets of a firm or the expected rate of return on the firm’s debt and equity?