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If a “typical” firm reports $20 million of retained earnings on its balance
sheet, can the firm definitely pay a $20 million cash dividend?
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- If a typical firm reports $20 million of retained earnings on its balance sheet, could its directors declare a $20 million cash dividend without any qualms? Explain why or why not.If a "typical" firm reports $20 million of retained earnings on its balance sheet, could its directors declare a $20 million cash dividend without having any qualms about what they were doing? Explain your answer.A firm has a market value equal to its book value. Currently, the firm has $500,000 of excess cash, $4,500,000 in other assets, $1,000,000 in liabilities, $40,000 in common stock at $1 par, $0 in retained earnings, and $30,000 in net income. Assume that the firm uses all of its excess cash to repurchase some of its shares outstanding. How many shares will be outstanding after the repurchases are completed? (Round, if necessary, your final answer to the whole number).
- A firm has a market value equal to its book value. Currently, the firm has excess cash of $11,500 and other assets of $28,500. Equity is worth $40,000. The firm has 950 shares of stock outstanding and net income of $3,800. What will the stock price per share be if the firm pays out its excess cash as a cash dividend?A firm has a market value equal to its book value. Currently, the firm has excess cash of $7,000 and other assets of $21,000. Equity is worth $28,000. The firm has 600 shares of stock outstanding and net income of $2,400. What will the stock price per share be if the fim pays out Its excess cash as a cash dividend?A firm has a market value equal to its book value. Currently, the firm has excess cash of $500 and other assets of $8,000. Equity is worth $8,500. The firm has 850 shares of stock outstanding and net income of $1,200. What will the new earnings per share be if the firm uses its excess cash to complete a stock repurchase?
- A firm has gross profit of $45 million, EBIT of $20 million, and net income of $8.5 million. If the firm has 5 million shares outstanding, what is the firm's EPS?On their books, Boston Enterprises has $3.4 billion in paid-in capital and $1.8 billion in retained earnings. What is the maximum amount that Boston Enterprises could consider paying in dividends to stockholders, assuming they have the cash on hand? Select answer from the options below $1.6 billion $3.4 billion $1.8 billion $5.2 billionCompany has assets of market value $400 mill. $60 mill worth is cash debt outstanding has market value of $150 million, 20 million shares outstanding. -Assuming perfect capital markets, if the company distributes $60 million in cash as a dividend, calculate its debt-to-equity ratio after the dividend payment
- Based on the corporate valuation model, the total corporate value of Chen Lin Inc. is $725 million. Its balance sheet shows $160 million in notes payable, $130 million in long-term debt, $30 million in preferred stock, $140 million in retained earnings, and $280 million in total common equity. If the company has 10 million shares of stock outstanding, what is the best estimate of its stock price per share? a. $40.50 b. $43.00 c. $56.50 d. $43.50 e. $26.50A firm has $800,000 in paid-in capital, retained earnings of $40,000 (including the current year’s earnings), and 25,000 shares of common stock outstanding. In the current year, it has $29,000 of earnings. What is the most the firm can pay in cash dividends to each common stockholder? (Assume that legal capital includes all paid-in capital.) How would an $0.80/share dividend affect the firm’s balance sheet? If the firm cannot raise new external funds, what do you consider the key constraint with respect to the magnitude of the firm’s dividend payments? Why?A public company has a book value of $128 million. They have 20 million shares outstanding, with a market price of $4 per share. What inference can be drawn about the market's opinion on the company's assets?