What is share capital retirement? What is the effect of this? Discuss.

Q: What role do interest rates play in allocating capital to different potential borrowers?

A: Rate of interest : It is the amount paid by a borrower to use the capital borrowed from the…

Q: What are some advantages and disadvantages of stockrepurchases?

A: Answer: Stock repurchases is nothing but the allocation of profits by a corporation to owners by…

Q: How does the availability and cost of outside capital affect dividend policy?

A: The question is based on the concept of dividend policy and factors of dividend policy.

Q: Discuss how prospect theory explains the equity premium puzzle?

A: The equity premium puzzle means outperformance of stocks over Treasury bills,  which is based on…

Q: If you were a CFO considering implementation of a dividend payout policy, which factors would…

A: Dividend payout policy: An organization's dividend policy manages the measure of dividends paid out…

Q: what is the current 'share price?

A: Introduction: The term share price can be defined as the price at which the stock is currently…

Q: What are the factors favoring a high-dividend policy?

A: Dividend refers to portion of net earnings of the company that is shared with common stock holders…

Q: What is equity capital?

A: The business cannot operate without funds and the company arranges these funds for the business…

Q: equity capital using SML method?

A: The cost of Capital of an Equity share is the minimum return an investor expects from an investment…

Q: What are the considerations that may be received in exchanged for share capital? What are the…

A: The money a firm raises by issuing common or preferred shares is referred to as share capital. With…

Q: what sense is a firm's WACC also the rate of return that should be earned on its investments?

A: Step 1   The WACC of a company is the overall needed return, which is the discount rate that should…

Q: capital market?

A: Introduction: Financial market is a market where buyers & sellers engage in the activity of…

Q: What is different between residual dividend, dividend policy and share repurchase ?

A: To arrange the funds for the business operations, firms issue various securities and pay return on…

Q: dividend reinvestment plan

A: Benefits to Investors- *Investors accumulate more shares without paying any commission or brokerages…

Q: Share option compensation is what accounting subject?

A: Stock-based compensation: It is a way of paying employees, executives, and directors of a company…

Q: How do the availability and cost of outside capital affect dividendpolicy?

A: Dividends are the profits that are paid to the stockholders. The company always tries to achieve a…

Q: How is preferred stock similar to long-term debt? How is it comparable to equity?

A: The Answer :

Q: 1. Explain how to account for share investment?

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: How do investment opportunities affect dividend policy?

A: The question is based on the concept of investment policy and its impact on dividend policy of a…

Q: Is share dividend payable a current or a non current liability? Explain your answer.

A: The dividend is payable to shareholders on a number of shares they hold as of the date of…

Q: What is the ex-dividend date, and why is it important to investors?

A: One business day before the record date of a stock is referred as ex-dividend date.  Whenever a…

Q: What is the cost of preferred equity?

A: Cost of preferred stock is the rate of return derived from the preference stock by the…

Q: What are the advantages and disadvantages of higher dividends to investors?

A: Dividend can be defined as the division of profits accumulated by the company to its shareholders in…

Q: Why would a firm repurchase its stock? Discuss.

A: Repurchasing shares: It is also called buyback of shares. The company purchases its previously owned…

Q: What are dividend reinvestment plans?

A: Introduction: Usually, dividend is nothing but, sharing a portion of profits of the corporation, as…

Q: what is the after tax ytm? what is the cost of common stock? what is the cost of preferred stock…

A: Yield to maturity considers the coupon payment along with the price of the bond. Yield to maturity…

Q: Why is premium on issue of debentures considered a capital profit?

A: Debenture: Debenture is a type of debt instrument and it is unsecured by collateral. Since,…

Q: When does a share capital becoming outstanding?

A: Share capital consists of authorized share capital, issued and paid up share capital.

Q: Do investors generally prefer dividends or share repurchases? Support your answer.

A: Firm issues various securities to arrange the funds for the business and pay periodicals return on…

Q: What common assumptions do the Capital Asset Pricing Model (CAPM) and Arbitrage Pricing Theory (APT)…

A: Portfolio management is the process of encompassing the activities of investment in assets and…

Q: WHAT IS THE EQUITY INVESTMENT?

A: Equity: Equity refers to that part of the company’s capital which is raised by issuing equity…

Q: What are Quoted Investments ?

A: Quoted investment: It is an accounting term for investment in share or debenture, which is quoted on…

Q: Explain the Investment Appeal of Equity Trusts?

A: Answer: REIT is a corporation that maintains and manages income generating real estate properties in…

Q: How buyouts are similar to early retirement?

A: Inside a certain firm A buyout is the purchase of a controlling interest in a company. A management…

Q: What is the investor’s expected after-tax internal rate of return on equity invested (ATIRR)?

A: After-tax return refers to the net return after adjusting the tax payable on it.

Q: How are share repurchases an alternative to dividends, and why might investors prefer them

A: The share repurchase is the alternative to dividends because when a company repurchases it’s issued…

Q: What are bonus shares?

A: Bonus shares are given from reserves and surplus/retained earnings.

Q: What is an asset allocation in investing equity securities?

A: Asset allocation means the investment portfolio is splitted based on the asset categories like…

Q: Discuss the application of the Capital Asset Pricing Model in stock selection.

A: CAPM is an abbreviation used for Capital asset Pricing model which helps the investors in evaluating…

Q: What amount should be reported as share capital?

A: The share capital is credited with only the face value of shares issued. This is calculated by…