Principles of Corporate Finance
13th Edition
ISBN: 9781260465099
Author: BREALEY, Richard
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 16, Problem 9PS
Information content of dividends Does the good news conveyed by the announcement of a dividend increase mean that a firm can increase its stock price in the long run simply by paying cash dividends? Explain.
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1. Is stock bonus a real dividend payment in principle?
2. Briefly describe the information signaling effect caused by dividend reduction announcement (in terms of assumption and market reaction)
Is this statement true or false? Give a reason for your answer.
"A company can always increase its stock price by increasing its dividend payout ratio."
The most important factor to consider when determining the dividends to be declared is
a. the impact of inflation on replacement costs
b. any future planned use of retained earnings
d. the future planned use of cash available at the date of dividend distribution
e. shareholders’ expectation about the firms’ profitability
Chapter 16 Solutions
Principles of Corporate Finance
Ch. 16 - Dividend payments In 2017, Entergy paid a regular...Ch. 16 - Dividend payments Seashore Salt Co. has surplus...Ch. 16 - Repurchases Look again at Problem 2. Assume...Ch. 16 - Repurchases An article on stock repurchase in the...Ch. 16 - Company dividend policy Here are several facts...Ch. 16 - Prob. 7PSCh. 16 - Information content of dividends What is meant by...Ch. 16 - Information content of dividends Does the good...Ch. 16 - Information content of dividends Generous dividend...Ch. 16 - Prob. 11PS
Ch. 16 - Payout policy in perfect capital markets Go back...Ch. 16 - Payout policy in perfect capital markets Go back...Ch. 16 - Payout policy in perfect capital markets Respond...Ch. 16 - Prob. 15PSCh. 16 - Repurchases and the DCF model Hors dAge...Ch. 16 - Repurchases and the DCF model Surf Turf Hotels is...Ch. 16 - Repurchases and the DCF model House of Haddock has...Ch. 16 - Repurchases and the DCF model Little Oil has 1...Ch. 16 - Repurchases and EPS Many companies use stock...Ch. 16 - Dividends and value We stated in Section 16-3 that...Ch. 16 - Payout and valuation Look back one last time at...Ch. 16 - Dividend clienteles Mr. Milquetoast admires Warren...Ch. 16 - Prob. 24PSCh. 16 - Payout and taxes Which of the following U.S....Ch. 16 - Prob. 26PSCh. 16 - Prob. 27PSCh. 16 - Prob. 28PSCh. 16 - Dividend policy and the dividend discount model...Ch. 16 - Prob. 30PS
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- Question Which of the following is NOT a reason for a high-dividend-payout policy? A. convenient and direct deposit of cash dividend B. avoidance of transaction costs for selling shares C. higher potential future returns for shareholders D. cash payments today versus uncertain cash payments tomorrowarrow_forwardWhich of the following do/does NOT describe how shareholders accrue investment returns (Select all that apply)? Status and power Cash dividends Wage from invested companies Increased value of their stockarrow_forwardWhen would a company be able to declare a cash dividend?arrow_forward
- Which of the following ways can a firm increase its dividends per share?arrow_forwardThe optimal distribution strategy achieves a balance between capital gains and current dividends in order to raise the stock price of the company. true or falsearrow_forwardDividend is a financing decision as well as distribution of earnings. Do you agree with the statement? Justify how does dividend affect the value of the firm? Compare the effect of distribution of dividends and retained earnings on the value of the firm.arrow_forward
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