PRIN.OF CORPORATE FINANCE >BI<
12th Edition
ISBN: 9781260431230
Author: BREALEY
Publisher: MCG CUSTOM
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Question
Chapter 16, Problem 13PS
Summary Introduction
To determine: The reason why managers and investors are more concerned with changes in the cash dividend rather than the level of cash dividends.
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Cash dividends speak louder than words when it comes to conveying information about management’s expectations of the future of the business.’
Discuss what does the above sentence mean about dividend policy issues.
Why do companies often repurchase stock instead of paying cash dividends? What is the effect for the stockholder?
When a firm is short of cash yet it wishes to distribute something to shareholders, it should consider a ________
a.
Cash dividend
b.
Liquidating dividend
c.
Stock dividend
d.
Rights shares
Chapter 16 Solutions
PRIN.OF CORPORATE FINANCE >BI<
Ch. 16 - Prob. 1PSCh. 16 - Company dividend policy Here are several facts...Ch. 16 - Dividend payments Seashore Salt Co. has surplus...Ch. 16 - Repurchases Look again at Problem 3. Assume...Ch. 16 - Payout policy in perfect capital markets Go back...Ch. 16 - Dividends and stock price Go back to the first...Ch. 16 - Prob. 7PSCh. 16 - Repurchases and the DCF model Surf Turf Hotels is...Ch. 16 - Prob. 9PSCh. 16 - Payout and taxes Which of the following U.S....
Ch. 16 - Prob. 11PSCh. 16 - Prob. 13PSCh. 16 - Information content of dividends What is meant by...Ch. 16 - Information content of dividends Does the good...Ch. 16 - Prob. 16PSCh. 16 - Repurchases and the DCF model Little Oil has 1...Ch. 16 - Dividends and value We stated in Section 16-3 that...Ch. 16 - Prob. 19PSCh. 16 - Repurchases and the DCF model House of Haddock has...Ch. 16 - Prob. 21PSCh. 16 - Prob. 22PSCh. 16 - Repurchases and the DCF model Hors dAge...Ch. 16 - Repurchases An article on stock repurchase in the...Ch. 16 - Prob. 25PSCh. 16 - Information content of dividends Generous dividend...Ch. 16 - Repurchases and EPS Many companies use stock...Ch. 16 - Prob. 28PSCh. 16 - Dividend policy and the dividend discount model...Ch. 16 - Prob. 30PS
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Similar questions
- What is the impact on stockholders equity when a company uses equity financing as a source of funding?arrow_forwardHow does the accounting for a liquidating dividend differ from that for a normal cash dividend?arrow_forwardThe dividend policy of businesses has been the subject of much debate in the financial management literature. Required: Discuss the view that the pattern of dividends can increase the wealth of shareholdersarrow_forward
- How does the declaration of a cash dividend affect a company’s assets, liabilities, and equity?a. It results in an increase to liabilities and a decrease to stockholders’ equity, while assetsremain the same.b. It results in an increase to liabilities and a decrease to assets, while stockholders’ equityremains the same.c. It results in an increase to assets and a decrease to liabilities, while stockholders’ equityremains the same.d. It results in an increase to stockholders’ equity and a decrease to assets, while liabilitiesremain the samearrow_forwardThe effect of the declaration of a cash dividend by the board of directors is to Increase Decrease Stockholders' equity Assets Liabilities Stockholders' equity Assets Liabilities Liabilities Assetsarrow_forwardThe idea that changes in dividend policy reflects managers' views about the firm's future earnings is known as: a) Modigliani and Miller Theory b) Payoff Theory c) Dividend Signaling Hypothesis d) Pecking Order Hypothesisarrow_forward
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