Why would a company choose to have a low dividend payout ratio? A.The company has many investment opportunities with high growth potential B.The company has few investment opportunities and they have low growth potential C.The company has very low profits D.The company has very high profits E.The board of directors has decided to do so.
Q: Account A and Account B each receive a deposit at the same time. Account A earns interest at an…
A: In compound interest, the interest earned during a period gets added to the principal, and the new…
Q: 10. Suppose BABA's stock has a total return volatility of 56.32%. The stock's market beta is 1.71,…
A: Idiosyncratic volatility refers to the risk that a company faces that cannot be attributed to the…
Q: If an Allied Chemical zero coupon bond due in 12 years is selling for $420.00, what is its yield to…
A: Current price (P0) = $420 Maturity period (n) = 12 Years Face value of maturity value (Z) = $1000…
Q: 15-year annuity of thirty $10,000 semiannual payments will begin 11 years from now, with the first…
A: The annuity is series of the uniform periodic payments at regular intervals and the present value of…
Q: Compute the PI static for your firm's new project if the appropriate cost of capital is 11 percent.…
A: Cost of capital = 11% Profitability index (PI) is a capital budgeting measure to evaluate…
Q: Mr. Tim, the recently hired manager for this potential project is not convinced that using the IRR…
A: An indicator of the financial attractiveness of an investment is the modified internal rate of…
Q: Kaiser Industries has bonds on the market making annual payments, with 14 years to maturity, a par…
A: Price of bond is present value of coupon payment +Present value of par value of bonds taken on yield…
Q: TRUE OR FALSE: Because there is no accumulation or investment on which interest accrues, the future…
A: First let us define both an ordinary annuity and deferred annuity. When you purchase an annuity, you…
Q: Draw the Cash Flow Diagram for your car (or on of your family member's car). Assume the following:…
A: It indicates that core operations are bringing in revenue and that there is sufficient cash on hand…
Q: 5. Panadera Bakeshop involved in livestock production having a loan of P250,000 from City Savings…
A: We have to find the maturity value of a loan subjected to compound interest.
Q: information on its 2015 income statement: Sales = $215,000; COGS= $117,000; o Other operating…
A: Cash Flow Statement is the Statement of cash receipts and cash payments for the period. There are…
Q: Estimate the NPV, ROI, and payback period for the XYZ project using the information below, Estimated…
A: Year 0 1 2 3 Cost 200000 50000 50000 50000 Benefit 150000 150000 150000 Discount Rate =…
Q: In how many years will it take $17596accumulate to $31237 when you deposited in a savings account…
A:
Q: Pepa Madrigal has operated a very successful bakery for 30 years, and has accumulated investment…
A: The word "income tax" refers to a category of tax that governments levy on revenue produced by…
Q: On Jan 1, 2022 Sam has a net worth of $165,000.00. His net inflation is running at 8.440% annually.…
A: Due to inflation value of money decreases if the inflation is more than interest rate because…
Q: A disadvantage of holding TIPS is A If inflation does not occur then the value of holding TIPS…
A: Several statements have been given as disadvantages of TIPS. We have to find the correct one.
Q: 4.Hassan plans to retire 40 years from now, he wants to have AED 4.5 million. Hassan thinks he can…
A: Information Provided: Future value = 4,500,000 Interest rate = 10% Period from today till future…
Q: You received a credit card application from US Bank offering an introductory rate of 1.5% compounded…
A: The credit card balance will increase with the addition of interest on outstanding balance. It will…
Q: Automotive art Net Present Valueo N/A • Return on Investment (ROI) • Anticipated Benefits…
A: As per Bartleby guidelines, If multiple questions are posted, only the first 1 question will be…
Q: 10) Neighborhood Savings Bank is considering leasing $100,000 worth of computer equipment. A 4 year…
A: Net Advantage to Leasing The savings can be made by an individual or a business by choosing the…
Q: You write a put with a strike price of $60 on stock that you have shorted at $60 (this is a “covered…
A: Strike prioce is $60 Spot price or Price at which stock is shorted is $60 Put premium is $1.80 To…
Q: Last year, the company paid a dividend of $3.40. It expects zero growth in the next year. In years…
A: The price of share will be calculated by Gorden's Model. As per Gorden's Model the share price will…
Q: evaluate financial statements to assess organizational performance using a range of measures and…
A: Financial statements are official records of a company, an individual, or another entity's financial…
Q: Company A raises the price of its Widget product from $100 to $110. As a result of the price…
A: An increase in production has led to a decline in sales. Based on the data, we have to find if the…
Q: Garland Electronics bought new machinery for $5 million. This is expected to result in additional…
A: Discounted payback period Discounted cash flow analysis is a method that was formed to overcome the…
Q: Madsen Motors's bonds have 25 years remaining to maturity. Interest is paid annually, they have a…
A: Information Provided: Years to Maturity = 25 Par value = $1000 Coupon rate = 10% Yield to Maturity…
Q: tephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation…
A: The intrinsic value of a stock: The intrinsic value of a stock refers to the fair value of the…
Q: a) Calculate the index value at time 1 and the rate of return if you use price-weighted method and…
A: Price weighted index is calculated using the sum of prices of 1 share of all the stocks in the…
Q: You will receive 24 annual payments of $40,500. The first payment will be received 5 years from…
A: Given: The first payment will be made after 5 years from today. The total number of payments made…
Q: Thermo-Tech Systems recently sold a $20 million bond issue with a 20-year maturity and a coupon rate…
A: With bonds, an investor can lend money to a business or the government for a predetermined amount of…
Q: Bond ratings measure a company's: Exchange rate risk. Equity risk. Interest rate risk.…
A: Several risks have been stated. We have to find the one that's measured by a company's bond rating.
Q: nsurance company, IHI, is part of a swap agreement with investment bank Lachlin Bank on a notional…
A: In case of interest rate swap, one party pays fixed rate to the counter party and receives the…
Q: George and Mary Keys are very excited over the news that they are to be parents. Since their…
A: A contract for insurance provides protection from losses resulting from particular calamities or…
Q: You are analyzing a stock. The stock's most recent dividend paid was $2.6 per share. You expect that…
A: Given The recent dividend is $2.6 per share Required return is 6%
Q: . According to the basic DuPont equation, a firm's ROE is the product of what other two ratios? he…
A: Return on Equity: It is a measure of profitability used in ratio analysis. It is calculated by…
Q: Solve the following: USE 4 DECIMAL PLACES Nominal Rate 5% compounded semi annually 5% compounded…
A: Equivalent interest rates are interest rates that produce the same return as the given annual…
Q: Complete the following table. Note: Round your "gross pay" to the nearest cent. Employee Donna Swan…
A: Gross pay is the total amount earned by the employee for the time he worked. It also includes…
Q: Compute the present value of a $160 cash flow for the following combinations of discount rates and…
A: As per the given information: Cash flow - $160 Provided are different combinations of discount rates…
Q: return and standard deviation of Netflix (NFLX) stock were 3.5% and 10%, respectively. For the same…
A: As per prescribed guidelines , if question involves multiple subparts , then 1st sub 3 parts needs…
Q: Stock in Cheezy-Poofs Manufacturing is currently priced at $50 per share. A call option with a $50…
A: a) If invested in option In case of call option, call buyer has right to buy and exercises option…
Q: Boris is saving for the down payment on a house. He deposits $13,750.00 today, $6,000.00 in 5…
A: The Future Value of a lumpsum deposit: An amount deposited earns an interest over its investment…
Q: The 2017 balance sheet of Dream, Inc., showed current assets of $1,320 and current liabilities of…
A: Here, To Find: Change in net working capital =?
Q: how many years will it take $18939accumulate to $34247 when you deposited in a savings account that…
A: Future value of amount increases with interest and with increase in time period and also it depends…
Q: Ife wants to save $55,856.00. Each period, she will save twice as much as the period before,…
A: This is the case of a growing annuity and as the amount saved is doubling in each period we can say…
Q: Suppose you sell a fixed asset for $90,000 when its book value is $95,000. If your company's…
A: Here, Sale value = $90,000 Book value = $95,000 Tax rate = 21% To Find: After-tax cash flow of this…
Q: Here is a list of bond transactions on May 15, 2009. For each transaction list the transaction…
A: Quotes for several bonds that were transacted on a particular day had been given. We need to…
Q: Determine the present value of the following single amounts. Note: Use tables, Excel, or a financial…
A: Cash flows can occur and can be received at different points of time. Due to the difference in the…
Q: warning signs associated with development of problem loan
A: Problem loan means lender is not able to recover the principal and interest from borrower & is…
Why would a company choose to have a low dividend payout ratio?
A.The company has many investment opportunities with high growth potential
B.The company has few investment opportunities and they have low growth potential
C.The company has very low profits
D.The company has very high profits
E.The board of directors has decided to do so.
B,C only
A,C,Eonly
B,D,Eonly
B,C,Eonly
A, C, Donly
Step by step
Solved in 2 steps
- What would be a reason a company would want to overstate income? A. to help nudge its stock price higher B. to lower its tax bill C. to show a decrease in overall profits D. none of the aboveFor each of the companies described here, would you expect it to have a low, medium, or high dividend-payout ratio? 4. A company with volatile earnings and high business risk? A. Low dividend-payout ratio B. Medium or high dividend-payout ratio.For each of the companies described here, would you expect it to have a low, medium, or high dividend-payout ratio? Explain why. d. A dividend-paying company that experiences an unexpected drop in earnings from an upward-sloping trend line e. A company with volatile earnings and high business risk
- Which of the following would be a viable way to earn abnormally high trading profits if markets are semistrong-form efficient?a. Buy shares in companies with low P/E ratios.b. Buy shares in companies with recent above-average price changes.c. Buy shares in companies with recent below-average price changes.d. Buy shares in companies for which you have advance knowledge of an improvement in the management team.For each of the companies described here, would you expect it to have a low, medium, or high dividend-payout ratio? Explain why. a. A company with a large proportion of inside ownership, all of whom are high-income individuals b. A growth company with an abundance of good investment opportunities c. A company that has high liquidity and much unused borrowing capacity and is experiencing ordinary growth d. A dividend-paying company that experiences an unexpected drop in earnings from an upward-sloping trend line e. A company with volatile earnings and high business riskAssuming that the fiscal health of the Health Company is not optimal, explain how Return on Equity (ROE) can help justify paying dividends to shareholders and increasing the company's debts. If Liver Corporation has a lower price/earnings (P/E) ratio than another firm engaged in the same business, what reasons might explain these differences? Describe at least three problems encountered in the analysis of financial indicators. Explain how the DuPont equation can help in analyzing company results.
- Is this statement true or false? Give a reason for your answer. "The bird-in-hand theory suggests that a company can reduce its cost of equity capital by reducing its dividend payout ratio."Here are 3 explanations to show the characteristics of a company which has β of above 1 (one). Choose an wrong answer. The volatility of the stock prices is higher than average companies. The volatility of the sales and profit is lower than average companies. The industry which the company belongs to tends to have higher volatility of sales and profit than average industries.4) Why do loss-making companies still pay a dividend?A) The tax benefits exceed the loss incurred in paying the dividend.B) Managers want to signal that the decline in earnings is temporary and that positive earnings are expected in the future.C) Managers realise that reduced dividends will result in lower staff motivation.D) Managers want to signal that the decline in earnings is permanent and shareholders should take their profits.
- M-M theroy with perfect market suggests that divident payment: A.It dependes on the company's capital structure and retained earnings B.Has a positive impact on the value of a firm C.Has a negative impact on the value of a firm D.Has no impact on the value of a firmFor each of the companies described here, would you expect it to have a low, medium, or high dividend-payout ratio? 1. A company with a large proportion of inside ownership, all of whom are high-income individuals? A. Low dividend-payout ratio B. Medium or high dividend-payout ratio. 2. A growth company with an abundance of good investment opportunities? A. Low dividend-payout ratio B. Medium or high dividend-payout ratio. 3. A company that has high liquidity and much unused borrowing capacity and is experiencing ordinary growth? A. Low dividend-payout ratio B. Medium or high dividend-payout ratio. 4. A company with volatile earnings and high business risk? A. Low dividend-payout ratio B. Medium or high dividend-payout ratio.The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value added (EVA) approach are some examples of valuation techniques. The corporate valuation model is similar to the dividend-based valuation that you’ve done in previous problems, but it focuses on a firm’s free cash flows (FCFs) instead of its dividends. Some firms don’t pay dividends, or their dividends are difficult to forecast. For that reason, some analysts use the corporate valuation model. Charles Underwood Agency Inc. has an expected net operating profit after taxes, EBIT(1 – T), of $17,400 million in the coming year. In addition, the firm is expected to have net capital expenditures of $2,610 million, and net operating working capital (NOWC) is expected to increase by $30 million. How much free cash flow (FCF) is Charles Underwood Agency Inc. expected to generate over the next year? $14,820 million $19,980 million $321,693 million $14,760 million…