Corporate Finance, Student Value Edition Plus MyLab Finance with Pearson eText -- Access Card Package (4th Edition)
4th Edition
ISBN: 9780134426792
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 17, Problem 4P
RFC Corp. has announced a $1 dividend. If RFC’s price last price cum-dividend is $50, what should its first ex-dividend price be (assuming perfect capital markets)?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
RFC Corp. has announced a$2.40 dividend. If RFC's last price cum-dividend is $48 , what should be its first ex-dividend price (assuming perfect capital markets)?
According to the dividend discount model, what is the value of a share of Bull DogPretzels stock today if the firm’s cost of equity capital is 9.0%?
How is the answer 15.02? What is the fastest way doing by hands?
Matilda Industries pays a dividend of $2.15 per share and is expected to pay this amount indefinitely. If Matilda's equity cost of capital is 10%, which of the following would be expected to be closest to Matilda's stock price?
Chapter 17 Solutions
Corporate Finance, Student Value Edition Plus MyLab Finance with Pearson eText -- Access Card Package (4th Edition)
Ch. 17.1 - Prob. 1CCCh. 17.1 - Prob. 2CCCh. 17.2 - Prob. 1CCCh. 17.2 - In a perfect capital market, how important is the...Ch. 17.3 - Prob. 1CCCh. 17.3 - Prob. 2CCCh. 17.4 - Prob. 1CCCh. 17.4 - Prob. 2CCCh. 17.5 - Is there an advantage for a firm to retain its...Ch. 17.5 - Prob. 2CC
Ch. 17.6 - Prob. 1CCCh. 17.6 - Prob. 2CCCh. 17.7 - Prob. 1CCCh. 17.7 - Prob. 2CCCh. 17 - Prob. 1PCh. 17 - ABC Corporation announced that it will pay a...Ch. 17 - Prob. 3PCh. 17 - RFC Corp. has announced a 1 dividend. If RFCs...Ch. 17 - Prob. 5PCh. 17 - KMS Corporation has assets with a market value of...Ch. 17 - Natsam Corporation has 250 million of excess cash....Ch. 17 - Suppose the board of Natsam Corporation decided to...Ch. 17 - Prob. 9PCh. 17 - Suppose BE Press paid dividends at the end of each...Ch. 17 - The HNH Corporation will pay a constant dividend...Ch. 17 - Prob. 12PCh. 17 - Prob. 13PCh. 17 - Prob. 14PCh. 17 - Suppose that all capital gains are taxed at a 25%...Ch. 17 - Prob. 16PCh. 17 - Prob. 17PCh. 17 - Prob. 18PCh. 17 - Prob. 19PCh. 17 - A stock that you know is held by long-term...Ch. 17 - Clovix Corporation has 50 million in cash, 10...Ch. 17 - Assume capital markets are perfect. Kay Industries...Ch. 17 - Redo Problem 22., but assume that Kay must pay a...Ch. 17 - Harris Corporation has 250 million in cash, and...Ch. 17 - Redo Problem 22, but assume the following: a....Ch. 17 - Prob. 26PCh. 17 - Use the data in Table 15.3 to calculate the tax...Ch. 17 - Explain under which conditions an increase in the...Ch. 17 - Why is an announcement of a share repurchase...Ch. 17 - AMC Corporation currently has an enterprise value...Ch. 17 - Prob. 31PCh. 17 - Prob. 32PCh. 17 - Explain why most companies choose to pay stock...Ch. 17 - Prob. 34PCh. 17 - Prob. 35P
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
- Matilda Industries pays a dividend of $2.50 per share and is expected to pay this amount indefinitely. If Matilda's equity cost of capital is 12%, which of the following would be expected to be closest to Matilda's stock price? A. $12.50 B. $16.66 C. $20.83 D. $26.04arrow_forwardAnle Corporation has a current stock price of $20 and is expected to pay a dividendof $1 in one year. Its expected stock price right after paying that dividend is $22.b. How much of Anle’s equity cost of capital is expected to be satisfied by dividendyield and how much by capital gain?arrow_forwardThe investment banking firm of Einstein & Co. will use a dividend valuation model to appraise the shares of the Modern Physics Corporation. Dividends (D1) at the end of the current year will be $1.64. The growth rate (g) is 8 percent and the discount rate (Ke) is 13 percent. What should be the price of the stock to the public? If there is a 7 percent total underwriting spread on the stock, how much will the issuing corporation receive? If the issuing corporation requires a net price of $31.30 (proceeds to the corporation) and there is a 7 percent underwriting spread, what should be the price of the stock to the public? (Round to two places to the right of the decimal point.)arrow_forward
- Anle's Corporation has a current price of $12, is expected to pay a dividend of $1 in one year, and its expected price right after paying that dividend is $16. What is Anle's expected dividend yield? What is Anle's expected capital gain rate? What is Anle's equity cost of capital? a. What is Anle's expected dividend yield? Anle's expected dividend yield is b. What is Anle's expected capital gain rate? Anle's expected capital gain rate is c. What is Anle's equity cost of capital? Anle's equity cost of capital is %. (Round to two decimal places.) %. (Round to two decimal places.) %. (Round to two decimal places.)arrow_forwardAssume Evco, has a current stock price of $51.07 and will pay a $1.95 dividend in one year, its equity cost of capital is 10%. What price must you expect stock to sell for immediately after the firm pays the dividend in one year to justify its current price?arrow_forwardNogrowth Corporation currently pays a dividend of $0.43 per quarter, and it will continue to pay this dividend forever. What is the price per share of NoGrowth stock if the firm's equity cost of capital 11.48%? The stock price is $____ (Round to the nearest cent.)arrow_forward
- Bates, Inc. pays a dividend of $1.00 and is currently selling for $32.50. If investors require a 12% returnon their investment from buying Bates stock, what growth rate would Bates Inc. have to provideinvestors?arrow_forwardAnle Corporation has a current stock price of $20 and is expected to pay a dividendof $1 in one year. Its expected stock price right after paying that dividend is $22.a. What is Anle’s equity cost of capital?b. How much of Anle’s equity cost of capital is expected to be satisfied by dividendyield and how much by capital gain?arrow_forwardAnle Corporation has a current stock price of $19.49 and is expected to pay a dividend of $1.25 in one year. Its expected stock price right after paying that dividend is $21.26. a. What is Anle's equity cost of capital? b. How much of Anle's equity cost of capital is expected to be satisfied by dividend yield and how much by capital gain?arrow_forward
- The Dunn Corporation is planning to pay dividends of $540000. There are 270000 shares outstanding, and earnings per share are $4. The stock should sell for $48 after the ex-dividend date. If, instead of paying a dividend, the firm decides to repurchase stock,a. What should be the repurchase price? b. How many shares should be repurchased? c. What if the repurchase price is set below or above your suggested price in part a? d. If you own 100 shares, would you prefer that the company pay the dividend or repurchase stock? a. 3/10, net 45 b. 3/15 net 30 c. 3/15 net 60 d.2/10 net 45arrow_forwardThe Wellington Co. likes to use the dividend discount model to estimate its cost of equity. What should that be (in percent to two places) if their stock today is $54 and with a constant dividend growth of 3% their next dividend is estimated to be $0.91? Urgent please helparrow_forwardOwenInc has a current stock price of $13.60 and is expected to pay a $1.00 dividend in one year. If OwenInc's equity cost of capital is 12%, what price wouldOwenInc's stock be expected to sell for immediately after it pays the dividend? A. $11.38 B. $14.23 C. $15.23 D. $9.96arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Dividend explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Wy7R-Gqfb6c;License: Standard Youtube License