Essentials of Corporate Finance with Connect
9th Edition
ISBN: 9781259697456
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Bradford D Jordan Professor
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 14, Problem 9CTCR
Dividend Policy. During 2014, 207 companies went public with common stock offerings, raising a combined total of $42.3 billion. Relatively few of these 207 companies involved paid cash dividends. Why do you think most chose not to pay dividends?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Requirement 1. Compute
AustinAustin
Company's earnings per share for
20182018.
Assume the company paid the minimum preferred dividend during
20182018.
Round to the nearest cent.
Select the formula, then enter the amounts to calculate the company's earnings per share for
20182018.
(Abbreviations used: Ave. = average, OS = outstanding, SE = stockholders' equity, shrs = shares.)
(
-
)
/
=
Earnings per share
(
-
)
/
=
Choose from any list or enter any number in the input fields and then click Check Answer.
2
parts remaining
Clear All
Check Answer
Data Table
2018
2017
Income Statement—partial:
Net Income
$6,660
$20,000
Dec. 31, 2018
Dec. 31, 2017
Balance Sheet—partial:
Total Assets
$200,000
$265,000
Paid-In Capital:
Preferred Stock—9%, $6 Par Value;…
R.R. Donnelley & Sons.
How many shares of the company's stock are outstanding? What is the total market value of the firm?
What were its profits in the most recent fiscal year? (as on 2015) (collect data from finance.yahoo.com)
Which of the following statements about dividends is TRUE?
A.Dividends are typically set between P20 and P30 per shareB.Dividends cannot legally be reinvested in the same company where they were earnedC.Dividends are usually paid quarterly by well established publicly traded companiesD.Dividends are earned when you sell your shares for a higher price than when you bought them
Chapter 14 Solutions
Essentials of Corporate Finance with Connect
Ch. 14.1 - Prob. 14.1ACQCh. 14.1 - Prob. 14.1BCQCh. 14.1 - Prob. 14.1CCQCh. 14.2 - Prob. 14.2ACQCh. 14.2 - Prob. 14.2BCQCh. 14.2 - Prob. 14.2CCQCh. 14.3 - Prob. 14.3ACQCh. 14.3 - Prob. 14.3BCQCh. 14.5 - Prob. 14.5ACQCh. 14.5 - Prob. 14.5BCQ
Ch. 14 - What are the forms of cash dividends?Ch. 14 - Prob. 14.2CCh. 14 - Prob. 14.3CCh. 14 - Prob. 14.4CCh. 14 - Prob. 14.5CCh. 14 - Prob. 1CTCRCh. 14 - Prob. 2CTCRCh. 14 - Prob. 3CTCRCh. 14 - Prob. 4CTCRCh. 14 - Prob. 5CTCRCh. 14 - Prob. 6CTCRCh. 14 - Prob. 7CTCRCh. 14 - Prob. 8CTCRCh. 14 - Dividend Policy. During 2014, 207 companies went...Ch. 14 - Prob. 10CTCRCh. 14 - Prob. 1QPCh. 14 - Prob. 2QPCh. 14 - Prob. 3QPCh. 14 - Prob. 4QPCh. 14 - Prob. 5QPCh. 14 - Stock Splits and Stock Dividends. Bermuda Triangle...Ch. 14 - Prob. 7QPCh. 14 - Prob. 8QPCh. 14 - Prob. 9QPCh. 14 - Prob. 10QPCh. 14 - Stock Splits. In the previous problem, suppose the...Ch. 14 - Prob. 12QPCh. 14 - Dividend Policy. The Quick Buck Company is an...Ch. 14 - Expected Return, Dividends, and Taxes. The Gecko...Ch. 14 - Prob. 15QPCh. 14 - Prob. 1CCCh. 14 - Prob. 2CCCh. 14 - Prob. 3CCCh. 14 - Prob. 4CCCh. 14 - Prob. 5CCCh. 14 - Prob. 6CC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- 10. At December 31, 2015, the records of Kosme Corporation provided the following: (see attached image for the given. someone already answer letter a to c, so please answer letter d to g. Please. thank you so much!!) Direction:d. Give the earnings per share. ___ Round your answer to two decimal places.e. Amount of dividends paid during 2015. ___f. Amount of treasury shares reported in the stockholders' equity ___g. Amount of free retained earnings on December 31. ___arrow_forwardPlease see the incorrecgt answers I got. Can you help me solve them correctly? The following information is available for Crane Enterprises: 2014 2013 Current liabilities $168,000 $196,000 Long-term liabilities 272,000 336,000 Common stockholders' equity 732,000 880,000 Preferred stockholders’ equity 108,000 108,000 Dividends paid to common stockholders 38,400 33,600 Dividends paid to preferred stockholders 31,520 9,600 Interest expense 20,000 16,800 Net income 96,000 160,000 Income tax expense 34,000 43,200 Net sales 4,760,000 4,960,000 Common shares outstanding 64,000 59,200 Calculate each of the following for 2014. (Round last four answers to 1 decimal place, e.g. 527.5.) Payout ratio for 2014 enter the payout ratio for 2014 in percentages % Return on common stockholders’ equity for 2014 enter the return on…arrow_forwardIn 2014, Gap completed $1.5 billion in share buybacks, and its stock went up by 6%. Which of the following is a reason stock prices go up after the announcement of a stock buyback? a. Signaling b. Anti-Dilution c. Value Creation d. Taxesarrow_forward
- Use the information for the question(s) below. In November 2009, Perrigo Co. (PRGO) had a share price of $39.20. They had 91.33 million shares outstanding, a market-to-book ratio of 3.76. In addition, PRGO had $845.01 million in outstanding debt, $163.82 million in net income, and cash of $257.09 million. Perrigo's market capitalization is closest to: A) $952.16 million B) $3,580.14 million C) $4,168.06 million D) $4,425.15 millionarrow_forwardUse the information for the question(s) below. In November 2009, Perrigo Co. (PRGO) had a share price of $39.20. They had 91.33 million shares outstanding, a market-to-book ratio of 3.76. In addition, PRGO had $845.01 million in outstanding debt, $163.82 million in net income, and cash of $257.09 million. Perrigo's book value of equity is closest to: A) $952.16 million B) $3,580.14 million C) $4,168.06 million D) $4,425.15 millionarrow_forwardAt the April 2015 stock price of $14.59, the market values zulily at $1.86B. This is a big drop from the February 2014 high of $68.39 a share price. Describezulily’s principle assets. Does a $1.86B valuation seem appropriate, given your description of the company’s assets? Justify your answer.arrow_forward
- 1. Is Partlow's preferred stock cumulative or noncumulative? How can you tell? 2. Partlow declares cash dividends of $30,000 for 2010. How much of the dividends goes to preferred. How much goes to common? 3. Partlow passed the preferred dividend in 2011 and 2012. In 2013 the company declares cash dividends of $45,000. How much of the dividend goes to preferred? How much goes to common?arrow_forwardYou have reviewed the characteristics and historical prices of two companies (A and B), and have estimated their relations to the wider market, detailed below: Company A Company B $1.20 Current dividends per share (just paid) $0.10 Current Beta 0.9 1.3 Growth in dividends 3% 4% Date Share Price A Share Price B 2016 $2.15 $12.96 2017 $2.24 $12.45 2018 $2.20 $13.94 2019 $2.45 $15.76 2020 $2.77 $18.88 Other information: Current risk-free rate of return: 3% р.а. Current return on market portfolio: 8% p.a. a) Calculate the expected return and standard deviation for share A and B. b) Calculate the required return for share A and B, given their risk characteristics. c) Calculate the intrinsic value of Company A's and B's shares. Based on your calculated intrinsic value, identify whether you would buy or sell the shares, using the 2020 share price for each share as a reference value. Provide justification for your decision.arrow_forwardUse the information for the question(s) below. In November 2009, Perrigo Co. (PRGO) had a share price of $39.20. They had 91.33 million shares outstanding, a market-to-book ratio of 3.76. In addition, PRGO had $845.01 million in outstanding debt, $163.82 million in net income, and cash of $257.09 million. Perrigo's enterprise value is closest to: A) $952.16 million B) $3,580.14 million C) $4,168.06 million D) $4,425.15 millionarrow_forward
- 9. The stockholders’ equity section of Kay Corporation at the end of 2015 showed: (see attached images for the given, please answer it. thank you so much) a.What is the peso amount to be reported for preference shares? b. What is the average price for which ordinary shares were issued? c. If preference shares were issued at an average price of P53 per share, what amount should appear in its paid-in capital in excess of par? d. What is the average cost per share of treasury stock? (Round to the nearest cent.) e. What is the revised retained earnings if the net income for the year is P167,000 and total dividends declared is P50,000? f. Present the shareholders’ equity.arrow_forward9. The stockholders’ equity section of Kay Corporation at the end of 2015 showed: (see attached images for the given, someone already answer letter a to c, so please answer letter d to f. please answer it. thank you so much) d. What is the average cost per share of treasury stock? (Round to the nearest cent.) e. What is the revised retained earnings if the net income for the year is P167,000 and total dividends declared is P50,000? f. Present the shareholders’ equity.arrow_forwardFelton Publishing recently completed its IPO. The stock was offered at $14.07 per share. On the first day of trading, the stock closed at $19.97 per share. a. What was the initial return on Felton? b. Who benefited from this underpricing? Who lost, and why?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education
Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education
Stockholders Equity: How to Calculate?; Author: Accounting University;https://www.youtube.com/watch?v=2jZk1T5GIlw;License: Standard Youtube License