net profit of lily fashion house ltd in the current year is $2,575,000. the company is planning to launch a project that will requires an investment of $745000 next year. today the comapny stock has market value of $22 each share. lily fashion house has the current capital structure of 60% in equity and 40% in debt. required: a. the company is paying a cash dividend of $4.50 each share plus an extra cash dividend of $1.5 each share. tomorrow the stock will go ex-dividend. explain way there is ex-dividend date and ex-dividend price? calculate the ex-dividend price tomorrow morning. assuming the tax on dividend is 25%? b. how much dividend lily fashion house can pay its shareholders this year and what is dividend payout ratio of the company. assume the residual dividend payout policy applies? c. floral textile ltd. is adaughter company of the lily fashion house group and currently under a liquidiation plan due to severe business contraction caused by the covid 19 pandemic. the company plans to pay total dividend of $3.5 million now and $8.5 million one year from now as a liquidating dividend. the required rate of return for shareholders is 13.5%. calculate the current value of the firm equity in total and per share if the firm has 2.5 million share outstanding.
net profit of lily fashion house ltd in the current year is $2,575,000. the company is planning to launch a project that will requires an investment of $745000 next year. today the comapny stock has market value of $22 each share. lily fashion house has the current capital structure of 60% in equity and 40% in debt. required:
a. the company is paying a cash dividend of $4.50 each share plus an extra cash dividend of $1.5 each share. tomorrow the stock will go ex-dividend. explain way there is ex-dividend date and ex-dividend price? calculate the ex-dividend price tomorrow morning. assuming the tax on dividend is 25%?
b. how much dividend lily fashion house can pay its shareholders this year and what is dividend payout ratio of the company. assume the residual dividend payout policy applies?
c. floral textile ltd. is adaughter company of the lily fashion house group and currently under a liquidiation plan due to severe business contraction caused by the covid 19 pandemic. the company plans to pay total dividend of $3.5 million now and $8.5 million one year from now as a liquidating dividend. the required
Step by step
Solved in 3 steps with 3 images
