Use online resources to work on this chapter's questions. Please note that website information changes over time, and these changes may limit your ability to answer some of these questions.
In this chapter's opening vignette, we discussed Apple's decision to establish a dividend payout policy in 2012 and its subsequent decisions to increase quarterly dividends and raise its repurchase program to $175 billion. Let's find out what has happened to Apple's (AAPL) dividend policy since the time of its original announcement. We can address this issue by relying on data provided on internet financial websites such as Yahoo! Finance, Morningstar.com, Google Finance, and MSN Money (www.msn.com/en-us/
6. Review the firm's annual cash flow statements. Has Apple been repurchasing stock, or has it been issuing new stock?
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Fundamentals of Financial Management (MindTap Course List)
- Use online resources to work on this chapter's questions. Please note that website information changes over time, and these changes may limit your ability to answer some of these questions. In this chapter's opening vignette, we discussed Apple's decision to establish a dividend payout policy in 2012 and its subsequent decisions to increase quarterly dividends and raise its repurchase program to 175 billion. Let's find out what has happened to Apple's (AAPL) dividend policy since the time of its original announcement. We can address this issue by relying on data provided on internet financial websites such as Yahoo! Finance, Morningstar.com, Google Finance, and MSN Money (www.msn.com/en-us/money/markets). You will have to use a combination of these sites to answer these questions. 5. Investors are more concerned with future dividends than historical dividends. Look at analysts' earnings estimates for the next year and the 5-year annual growth estimates. On the basis of these data, what would you expect Apples payout policy to be over the next 5 years? (Your answer will only be a guess based on current data.)arrow_forwardUse online resources to work on this chapter's questions. Please note that website information changes over time, and these changes may limit your ability to answer some of these questions. In this chapter's opening vignette, we discussed Apple's decision to establish a dividend payout policy in 2012 and its subsequent decisions to increase quarterly dividends and raise its repurchase program to 175 billion. Let's find out what has happened to Apple's (AAPL) dividend policy since the time of its original announcement. We can address this issue by relying on data provided on internet financial websites such as Yahoo! Finance, Morningstar.com, Google Finance, and MSN Money (www.msn.com/en-us/money/markets). You will have to use a combination of these sites to answer these questions. 2. Compare this information with other firms in the same industry. Has Apple behaved differently from its peers, or have there been industry-wide shifts? Google Finance provides data on related companies. Click Related companies on the left-hand side of your screen, and then click. Add or remove columns to see additional data, including dividend per share and dividend yield.arrow_forwardWith the 2013 data still on the screen, click the Chart sheet tab. The chart presented shows the rates of return for Global Technology for the last five years. Answer the following questions: a. In 2009, the rate of return on assets exceeded the rate of return on common stockholders equity. Why might this have occurred? Be as specific as possible. b. Is the company better off in 2013 than it was in 2009? Why or why not? When the assignment is complete, close the file without saving it again. Worksheet. Modify the RATIOA4 worksheet to have it compute two additional activity ratios: number of days sales in receivables and number of days sales in merchandise inventory. Use the 2012 and 2013 data and assume a 365-day year. Write out the formulas for your ratios in the spaces provided. Days sales in receivables (average collection period) ________________ Days sales in inventory (average sales period) ________________ Preview the printout to make sure that the worksheet will print neatly, and then print the worksheet. Save the completed file as RATIOAT. Chart. Using the RATIOA4 file, prepare a column chart that compares the acid test and current ratios for Global Technology for 2012 and 2013. Complete the Chart Tickler Data Table and use it as a basis for preparing the chart. Enter all appropriate titles, legends, and formats. Enter your name somewhere on the chart. Save the file again as RATIOA4. Print the chart.arrow_forward
- Use the internet to find a publicly-held companys annual report. Locate the section that comments on the Stockholders Equity section of the financial reports. What additional insights are you able to learn by looking further into the commentary? Is there anything that surprised you or that you think is missing and could help you if you were deciding whether to invest $100,000 of your savings in this companys stock?arrow_forwardDavid Lyons, CEO of Lyons Solar Technologies, is concerned about his firms level of debt financing. The company uses short-term debt to finance its temporary working capital needs, but it does not use any permanent (long-term) debt. Other solar technology companies have debt, and Mr. Lyons wonders why they use debt and what its effects are on stock prices. To gain some insights into the matter, he poses the following questions to you, his recently hired assistant: e. Suppose the expected free cash flow for Year 1 is 250,000 but it is expected to grow faster than 7% during the next 3 years: FCF2 = 290,000 and FCF3 = 320,000, after which it will grow at a constant rate of 7%. The expected interest expense at Year 1 is 128,000, but it is expected to grow over the next couple of years before the capital structure becomes constant: Interest expense at Year 2 will be 152,000, at Year 3 it will be 192,000 and it will grow at 7% thereafter. What is the estimated horizon unlevered value of operations (i.e., the value at Year 3 immediately after the FCF at Year 3)? What is the current unlevered value of operations? What is the horizon value of the tax shield at Year 3? What is the current value of the tax shield? What is the current total value? The tax rate and unlevered cost of equity remain at 25% and 14%, respectively.arrow_forwardIn 2022, the ABC Food company has total assets of $46,690,000, cash balance of $3,875,000, sales growth of -3% (-0.03), loss indicator of 1, CFO change indicator of 0. If the manager decides to invest $325,000, does she/he overinvest or underinvest? Based on the threshold of $60,000, do you have to conduct a further investigation and why?arrow_forward
- Your company is considering acquiring a private company (New Co., Inc.). The CFO has asked you to review the financial statements, look for key trends, and develop financial/operational questions to ask the management of New Co. when you meet next week. Calculate average collection period, total asset turnover, inventory turnover, and days in inventory. Calculate average collection period, total asset turnover, inventory turnover, and days in inventory for the four years. Assess the trends in activity of the firm, using your calculations in part 1, over the four year period. Calculate the gross profit margin, operating margin, and net profit margin. Assess the profitability trends of the firm, using your calculations in part 3, over the four- year period. Develop three or four questions to ask the management of New Co. to help your management team understand trends uncovered by the ratio analysis. New Co., Inc. Income Statement 12/31/22 12/31/21 12/31/20 12/31/19 Revenue…arrow_forwardBobek Inc. has recently reported steadily increasing income. The company reported income of $20,000 in 2017, $25,000 in 2018, and $30,000 in 2019. A number of market analysts have recommended that investors buy the stock because they expect the steady growth in income to continue. Bobek is approaching the end of its fiscal year in 2020, and it again appears to be a good year. However, it has not yet recorded warranty expense. Based on prior experience, this year’s warranty expense should be around $5,000, but some managers have approached the controller to suggest a larger, more conservative warranty expense should be recorded this year. Income before warranty expense is $43,000. Specifically, by recording a $7,000 warranty accrual this year, Bobek could report an increase in income for this year and still be in a position to cover its warranty costs in future years. Instructions a. What is earnings management? b. Assume income before warranty expense is $43,000 for both 2020 and…arrow_forwardPlease answer D. The Digital Electronic Quotation System (DEQS) Corporation pays no cash dividends currently and is not expected to for the next five years. Its latest EPS was $12.50, all of which was reinvested in the company. The firm’s expected ROE for the next five years is 21% per year, and during this time it is expected to continue to reinvest all of its earnings. Starting in year 6, the firm’s ROE on new investments is expected to fall to 16%, and the company is expected to start paying out 45% of its earnings in cash dividends, which it will continue to do forever after. DEQS’s market capitalization rate is 20% per year. d. What is your estimate of DEQS’s intrinsic value per share if you expected DEQS to pay out only 25% of earnings starting in year 6? (Do not round intermediate calculations. Round your answer to 2 decimal places.)arrow_forward
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