1. In this section we examine three theories of investor preference: The dividend irrelevancetheory. The "bird in the hand" theory, the tax preference theory, which theory is the best?What is the different of stock dividends, stock splits, and stock repurchase.2. In the working capital management, we know about cash conversion cycle model. Forproblem if average inventories are $3 million and sales are $11 million. If receivables areS 657.535 and sales are $ 11 million. Then, if its cost of goods sold are $9 million per yearand if its accounts payable average S 657.535. What is the length of the cash conversionsicle?3. The ELGRAJO Corporation has a capital structure as follow (consider is optimal):25% Debt, 15% Preference Stock, and 60% Common Stock. Totally 100%. Expected netprofit is 17.142.860,- this rear. 30% Dividend payout ratio, tax is 40% and investorexpecting an income and growth dividend is 9% (g) on the future.Last year, company did pay dividend (Do) as 3.600 pershare and in this time sold 60.000pershare. The free risk Interest rate is 14% (km). The beta stocks of the corporation as 1.51(bi). This requirements for the new security offering.Common stock of flotation cost as 10% andPreferrent stock can be sold to public as 100.000,- pershare,With dividend as 11.000,- a flotation cost as 5.000,- pershare.The debt can be sold and interest payment is 12% (Kd)a. Calculate the component of cost of debt, cost of preferred stock, cost of retain earningsand cost of new common stock

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In this section we examine three theories of ivestor preference: The dividend irrelevance theory. The "bird in the hand" theory, the tax preference theory, which theory is the best? What is the different of stock dividends, stock splits, and stock repurchase.

In this section we examine three theories of ivestor preference: The dividend irrelevance theory. The "bird in the hand" theory, the tax preference theory, which theory is the best? What is the different of stock dividends, stock splits, and stock repurchase.

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter9: Stocks And Their Valuation

Section: Chapter Questions

Problem 9TCL

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