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.
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Q: amount of Dividends declared during the current period?
A:
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A: Dividend: The dividends are the returns provided to the shareholders by the company. The dividends…
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A: Outstanding Shares: The number of shares that are currently held by the company’s shareholders are…
Q: price-to-earnings ratio
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Q: A firm earns $895 million in profits and pays $626 million in dividends for the year. The firm has…
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Q: dividends per share if the firm used 20% debt financing and the firm followed a strict residual…
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A: solution concept The maximum amount of cash dividend that a company can declare is the amount…
Q: A firm has a market value equal to its book value. Currently, the firm has excess cash of $7,000 and…
A: Market Value = Book Value Excess Cash = 7000 Other Assets = 21000 Equity = 28000 Number of shares…
Q: A firm has a market value equal to its book value. Currently, the firm has excess cash of $7,000 and…
A: The price per share refers to the monetary value paid or received for a single share of stock.
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If a typical firm reports $20 million of
Introduction:
Cash dividends are the amount of cash that is declared and paid to stakeholders as an income from their share of investment in the firm. That remaining portion of the net income of an enterprise is called as retained earnings.
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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 having any qualms about what they were doing? Explain your answer.If a “typical” firm reports $20 million of retained earnings on its balancesheet, can the firm definitely pay a $20 million cash dividend?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 $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 $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 $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?Texas Tools Inc. has $20 million in earnings, pays $2.75 million in interest to bondholders, and pays $1.80 million in dividends to preferred stockholders. A. What are the common stockholders' residual claims to earnings? B. What are the common stockholders' legal, enforceable claims to dividends?A firm has a market value equal to its book value. Currently, the firm has excess cash of $1,800 and other assets of $5,700. Equity is worth $7,500. The firm has 750 shares of stock outstanding and net income of $1,500. The firm has decided to spend all of its excess cash on a share repurchase program. How many shares of stock will be outstanding after the stock repurchase is completed?
- TJ's has a market value equal to its book value. Currently, the firm has excess cash of $218,500, other assets of $897,309, and equity of $547,200. The firm has 40,000 shares of stock outstanding and net income of $59,800. Management has decided to spend 15 percent of the excess cash on a share repurchase program. How many shares of stock will be outstanding after the stock repurchase is completed?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?Brightland Inc. has a market value equal to its book value. Currently, thefirm has excess cash of $1,500, other assets of $5,800, and equity valuedat $5,000. The firm has 250 shares of stock outstanding and net income of$500. What will the new earnings per share be if the firm uses 30 percentof its excess cash to complete a stock repurchase?