The residual theory of dividends argues that dividends * A O are necessary and important to maintain the market price of any ordinary shares O not relevant unless there is an excess demand for cash dividends O can only be distributed if there is income remained after funding all prospective investment O are irrelevant in any dividend distribution plan
Q: ampierre makes brass and gold frames. The company computed this information to decide whether to swi...
A: In this question, we have to calculate allocation per unit using traditional method.
Q: John Bryant invests $45,000 at 9% annual interest, leaving the money invested without withdrawing an...
A: Compound interest (also known as compounding interest) is the interest on a loan or deposit that is ...
Q: In October, Dean Company exchanged an old packing machine costing P240,000 and 50% depreciated, for ...
A: Whenever a property is sold more than its carrying amount or value, a profit or gain on the sale of ...
Q: Preparing the Adjusting Entries at Year-End On Nov. 30, 2016, the end of fiscal year, the following ...
A: GIVEN Preparing the Adjusting Entries at Year-End On Nov. 30, 2019, the end of fiscal year, the fo...
Q: Prosperity Company holds 40% of the voting rights of MNO Co. The remaining shares was held by thousa...
A: Protective right is the right which protect the interest of party who holds that right but does not ...
Q: On January 1, 2021, Red Flash Photography had the following balances: Cash, $25,000; Supplies, $9,30...
A:
Q: e effect of financial distress and taxation on gearing? A. Both constrain gearing B. The ...
A: Gearing in accounting means how much is the debt against the equity in the capital structure of the ...
Q: Naughty Co. has a 12% note receivable dated June 30, 2009 in the original amount of P3,000,000. Paym...
A: Interest accrued on June 30, 2011 = Net Note receivable amount x rate of interest x no. of months in...
Q: Determine the present worth of the following cash flows based on an interest rate of 7.46% per year,...
A: ANSWER COMPUTATION OF PRESENT WORTH OF CASH FLOW END OF YEAR FUTURE CASH FLOW(1) PRESENT FACTOR...
Q: Len Gary started his own consulting firm, Gary Consulting, on June 1, 2022. The trial balance at Jun...
A: The question is based on the concept of Financial Accounting.
Q: Cullumber Electronics issues a $355,500, 3%, 10-year mortgage note on December 31, 2021. The proceed...
A: Interest = Loan amount x rate of interest x no. of months in calendar year /12 months Loan Payment =...
Q: ly. Thank you :)
A: In this question, we have to calculate the interest income of the third year of the contract.
Q: c0 Prepare a statement of cash flows using the indirect method LO4, 5, 6 he balance sheets for the I...
A: The cash flow statement is prepared to record the cash flow from various activities during the perio...
Q: P Company issues Php500,000 shares of its own Php10 par common stock for the net assets of S Company...
A: In case one company overtake the assets and liabilities of another company , then accounting for am...
Q: Bulldogs Inc. wants to analyze its variances in its actual and budgeted operation. There is no diffe...
A: Sale price variance = (Actual sales price per unit - Budgeted sales price per unit) x Actual no. of ...
Q: Cerise Company would record a note payable of_____, if the terms of the loan with a bank are as foll...
A: Present value (PV) of an future amount is equal amount of such at present, discounted at a particula...
Q: Wilma Company experienced a P500,000 decline in the market value of inventory at the end of the firs...
A: ANSWER The correct option is d.) first quarter 0 , Second quarter 0 EXPLANATION Interim periods are ...
Q: X Company Y Company Amount Percent Amount Percent Sales $ 148,000 100.00 $ 148,000 100.00 Variable c...
A: Formula: Break even sales value = Fixed cost / Contribution margin ratio
Q: Catalina Corporation begins the year with a $195 balance in Retained Earnings and a $320 balance in ...
A: Stockholder's equity: It implies to the net assets (assets - liabilities) that have shareholder's cl...
Q: munication moving in a specific C cilitates task accomplishments. munication
A: Casual communication with another person is known as informal communication.
Q: The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $1 per share, and there...
A: Dividend is the amount of return on the shares of an entity.
Q: Apr. 1. Paid the treasurer of the union the amount of union dues withheld from workers' earnings d...
A: Payroll Payroll is considered to be one of the important function in the business entity and to time...
Q: Reg 1 and 2 Reg 3 The company's business conditions are improving. One possible result is a sales vo...
A: Flexible Budget: It is the budget that is adjusted to the volume level of company and continuously ...
Q: The retained earnings immediately after the combination is!
A: Retained Earnings immediately after the combination includes: a)Parent Company Pre combination Retai...
Q: d. Bonds that will mature in 5 years are purchased. The company has a strategy to hold them to colle...
A: Bond is actually a financial instrument which falls under the category of debt because it is a loan ...
Q: Bulldogs Inc. sells on term 3/20, net 40. Total sale for the year are P1,200,000 on which 40% is cas...
A: Average amount of account Receivable = Days of sales outstanding x Sales / 360 Days of Sales Outstan...
Q: Task 1 The following trial balance was extracted from the books of Zen Ltd. for the year ended 31/12...
A: An income statement is a financial report that indicates the revenue and expenses of a business. It ...
Q: On January 1, 2019 Pink Corp. sold a machine for $7,400 to slink Corp., its wholly-owned subsidiary....
A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets ...
Q: On January 1, 2022, P Company acquired 80% of S Company for P2,000,000. The fair value of identifiab...
A: Working: Unsold merchandise shipped from P at cost = P50,000/125% = P40,000 Unrealized profit on abo...
Q: 8. Using an annual interest rate of 9%, how long will it take a deposit of $1,500 to grow to $3,000,...
A: Deposit amount (PV) = $1500 Future value (FV) = $3000 Interest rate (r) = 9%
Q: Vaasa Chemicals makes a product by way of two processes – Mixing & Refining. Its process costing sys...
A: Introduction: An equivalent unit of production is a measure of the amount of work done by a manufact...
Q: X Company Y Company Amount Percent Amount Percent Sales $ 148,000 100.00 $ 148,000 100.00 Variable c...
A: Break even sales = Fixed costContribution margin ratio = $70,20070% = $100,286
Q: c. Stephanie reported $18,000 of earnings from her babysitting. Standard deduction
A: Solution:- Given, Stephanie is 12 years old and often assists neighbors on weekends by babysitting t...
Q: The following data refer to Solaris Power Ltd for the financial year ending 31 December 2021: Sales ...
A: Note: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-part...
Q: Slotkin Products purchased a machine for $39,000 on July 1, 2014. The company intends to depreciate ...
A: Formula: Depreciation rate = ( 100 / Useful life years )
Q: What is the estimated annual fixed manufacturing overhead ? If estimated fixed overhead is equal to ...
A: Gramps' Remedy manufactures athlete foot powder. The company uses standard costing system. Standard ...
Q: Statement 1: The estimated liability on contingent consideration is based on provisional amount subj...
A: Solution Estimated liability is a liability That is absolutely owed because the services or goods h...
Q: During the current year, Mute Corporation expected to sell 22,200 telephone switches. Fixed costs fo...
A: Contribution per unit = Selling price per unit - Variable cost per unit = $3,100 - $1,280 = $1,820 P...
Q: On August 1, Vermillion Ltd. accepted a $27,800 note from Borges Ltd. in settlement of an account re...
A: Interest accrued = Face value of notes x rate of interest x no. of months / 12 months
Q: Bulldogs Inc. expects to use 96,000 litters of paint annually costing P12 per litter. Inventory carr...
A: Carrying cost includes cost of store staff Interest of the locked up capital Cost of obsolescence C...
Q: Bulldogs Inc., a corporation that can only legally issue ordinary shares with par value, recently co...
A: New par value per share = Current par value per share x 1/ stock split ratio where, Current par valu...
Q: Ahmed is self-employed. He has a revenue of $170,000. His expenses for the year is $50,000. The fol...
A: The federal income tax appears to be a tax on earnings imposed by the US government. The Internal Re...
Q: Mavic Enterprises Post-Closing Trial Balance Dec. 31, 20X1 (in Philippine Peso) TITLE Dr Cr Petty Ca...
A: Statement of Financial position (Report Form) Assets Amount (P) Current assets Petty...
Q: Beachwood Manufacturing Inc's summarized financial data are shown as follows (amounts are in thousan...
A: Computation of EBITDA (earnings before interest, taxes, depreciation, and amortization) Particula...
Q: Cabrera Enterprises, a company that produces and sells a single product has provided its contributio...
A: Solution: Contribution margin per unit = Contribution margin / Nos of units = $813,750 / 52500 = $1...
Q: Danner Inc. has projected sales to be $100,000 in June, $90,000 in July, and $70,000 in August. Dann...
A: Month Projected Sales Amount June $100000 July $90000 August $70000
Q: P17.7 (LO 1, 4) (Debt Investment Entries) The following information relates to the debt investments ...
A: Note: Hi! Thank you for the question As per the honor code, We’ll answer the first question since th...
Q: The value of a correlation is reported to be r = 0.25. How is this interpreted?
A: Correlation: In the financial and investing sectors, correlation is a statistic that indicates the d...
Q: NightWoundsTime Brewing Co. distributes its products in an aluminum keg. Customers are charged a dep...
A: Adjusting journal entry: At year-end when the company finalizes its accounts then any unrecognized i...
Q: FIU Inc granted 25,000 stock options to its top management team on January 1, 2022. The options vest...
A: An employee stock option that grants specified employees of a company the right to buy a certain amo...
19
Step by step
Solved in 2 steps
- The residual theory of dividends argues that dividends a. can only be distributed if there is income remained after funding all prospective investment b. not relevant unless there is an excess demand for cash dividends c. are irrelevant in any dividend distribution plan d. are necessary and important to maintain the market price of any ordinary sharesDividend changes may be used by management as a credible communication tool to signal investors about future earnings under which of the following dividend policy theories? Select one: a. the clientele effect b. the expectations theory c. the residual dividend theory d. the information effect Question 19 Incorrect Flag question Question text In perfect capital markets there Select one: a. are no income taxes. b. are no flotation costs. c. All of these. d. is no informational content assigned to a particular dividend policy.The bird-in-the-hand argument espousing the importance of dividends or dividend relevance suggests that investors view a current (certain) dividend as less risky than future (uncertain) dividends or capital gains; nevertheless, proponents of this theory argue that this will have no significant impact on share price. Is this true or false
- All of the following are rationales given for a stock dividend or split EXCEPT A. there is positive informational content associated with the announcement. B. the price will not fall proportionately to the share increase. C. conservation of corporate cash. D. an optimum price range does not exist.Dividend changes may be used by management as a credible communication tool to signal investors about future earnings under which of the following dividend policy theories? Select one: a. the clientele effect b. the expectations theory c. the residual dividend theory d. the information effect Question 19 In perfect capital markets there Select one: a. are no income taxes. b. are no flotation costs. c. All of these.which one is correct please confirm? QUESTION 21 Finance researcher Myron Gordon argues that ____. a. the clientele effect has no influence on share value b. the existence of transaction costs has no impact on the dividend decision c. dividends reduce uncertainty, and thus the payment of dividends will increase the firm's value d. risk-averse shareholders may prefer some dividends over the promise of future capital gains if the interest rate is expected to decline
- When a stock repurchase occurs, which of the following is not correct?a. EPS decreasesb. Shares are repurchased then cancelledc. Investors may regard this as a tax break compared to a dividend paymentd. Costs in servicing small shareholders may be reducede. All of the above are correctIndicate whether the following statements are true or false. If the statementis false, explain why.e. A company that has established a clientele of investors who prefer largedividends is unlikely to adopt a residual dividend policy.In examining investors’ preferences for dividends, it is useful to begin with the concept of dividend irrelevance. Dividend irrelevance suggests that in a world with no taxes or brokerage (or transaction) costs, firms and investors are indifferent to the paying or receiving of dividends. However, as these restrictions are relaxed, various factors suggest that firms should pursue high or low payouts. One such factor is: Dividends received far into the future are significantly more uncertain than dividends received in the near future. Based on the factor described, identify whether investors, in general, will tend to favor high or low payout ratios. Favor a high payout Favor a low payout
- The issue as to whether dividend policy has an effect on share prices raises a question as to whether dividends paid out to stockholders are any more “certain” than the expected future dividends the stockholders hope to receive from retention of firm earnings. This is known as the bird-in-the-hand theory of dividend policy. Do you agree with this theory? Explain.The Discounted Dividend Model and the Corporate Valuation Model are two different ways to determine the intrinsic value of a share of stock. The Models are similar but do have some differences. Please review the following statements and select all of the ones (and only the ones) that reflect the differences between the two models. a. The Corporate Valuation Model can be used for companies with uneven cashflow growth rates and the Discounted Dividend Model can not. b. The Discounted Dividend Model uses dividends as the cash flows while the Corporate Valuation Model uses Free Cash Flow (FCF). c. The Discounted Dividend Model uses the required rate of return on the stock to discount the cash flows while the Corporate Valuation Model uses the Weighted Average Cost of Capital (WACC) to discount the cash flows. d. The Corporate Valuation Model requires you to back out the value of the firm's debt and preferred stock from your estimate of the corporation's…Why is the cost of retained earnings cheaper than the cost of issuing new common stock? Group of answer choices Issuing new common stock may send a negative signal to the capital markets, which may depress the stock price. When a company issues new common stock they also have to pay flotation costs to the underwriter. Either Neither