Fundamentals of Corporate Finance, 9th edition
Fundamentals of Corporate Finance, 9th edition
9th Edition
ISBN: 9781260151756
Author: Richard Brealey
Publisher: McGraw-Hill Education
Question
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Chapter 17, Problem 1QP

a)

Summary Introduction

To determine: The correct date for each terms.

a)

Expert Solution
Check Mark

Explanation of Solution

Matching table:

Fundamentals of Corporate Finance, 9th edition, Chapter 17, Problem 1QP , additional homework tip  1

b)

Summary Introduction

To determine: The date at which one of the stock price likely to fall by about the amount of the yield.

b)

Expert Solution
Check Mark

Explanation of Solution

The share cost is relied upon to fall on June 7, the ex-dividend date. The value falls on this day in light of the fact that, as the share goes ex-profit, the share proprietors are not, at this point qualified to gather the profit payable on July 2.

c)

Summary Introduction

To determine: The prospective dividend yield.

c)

Expert Solution
Check Mark

Explanation of Solution

Computation of dividend yield:

Fundamentals of Corporate Finance, 9th edition, Chapter 17, Problem 1QP , additional homework tip  2

Hence, the prospective dividend yield is 1.11%.

d)

Summary Introduction

To determine: The percentage pay-out ratio.

d)

Expert Solution
Check Mark

Explanation of Solution

Computation of percentage pay-out ratio:

Fundamentals of Corporate Finance, 9th edition, Chapter 17, Problem 1QP , additional homework tip  3

Hence, the percentage pay-out ratio is 15.79%.

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