BUS 225 DAYONE LL
17th Edition
ISBN: 9781264116430
Author: BLOCK
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 18, Problem 6DQ
Summary Introduction
To explain:The effect of the desire for control of the management on the willingness of a firm to pay dividend.
Introduction:
Dividend:
The portion of the profits of a company that the board decides to distribute to its shareholders is termed as dividend. It can be paid in cash or stock.
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A5 9a
9. Dividend policy
a. Define the information content effect of a dividend, and discuss whether or not it conveys information about a firm’s dividend policy.
p16
Which one of the following considerations are NOT a concern of managers when they make capital structure decisions?
Financial flexibility.
Net income risk.
Systematic risk.
Earnings impact.
Describe
1. How the RISK affects EFFICIENCY (operational or financing) that subsequently affects RETURN (for both major shareholders' return and minority shareholders' return) .
Notes
**It is good to differentiate how the RISK and EFFICIENCY affect major shareholders' return and minority shareholders' return respectively.
Chapter 18 Solutions
BUS 225 DAYONE LL
Ch. 18 - Prob. 1DQCh. 18 - Prob. 2DQCh. 18 - Prob. 3DQCh. 18 - Prob. 4DQCh. 18 - Prob. 5DQCh. 18 - Prob. 6DQCh. 18 - Prob. 7DQCh. 18 - Prob. 8DQCh. 18 - Prob. 9DQCh. 18 - Prob. 10DQ
Ch. 18 - Prob. 11DQCh. 18 - Prob. 1PCh. 18 - Prob. 2PCh. 18 - Prob. 3PCh. 18 - Prob. 4PCh. 18 - Prob. 5PCh. 18 - Planetary Travel Co. has $240,000,000 in...Ch. 18 - Prob. 7PCh. 18 - Prob. 8PCh. 18 - In doing a five-year analysis of future dividends,...Ch. 18 - Prob. 10PCh. 18 - The shares of the Dyer Drilling Co. sell for $60 ....Ch. 18 - Prob. 12PCh. 18 - Prob. 13PCh. 18 - Phillips Rock and Mud is trying to determine the...Ch. 18 - Prob. 15PCh. 18 - Prob. 16PCh. 18 - Prob. 17PCh. 18 - Prob. 18PCh. 18 - Prob. 19PCh. 18 - Prob. 20PCh. 18 - Prob. 21PCh. 18 - Prob. 22PCh. 18 - Prob. 3WE
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- H5. Describe why a manager needs to understand the characteristics and importance of financial markets, including their liquidity, competitiveness, and efficiency.arrow_forwardDescribe how the business risk and financial risk could be included in the value of WACC, which is calculated with the formula: WACC=Wd*Rd*(1-Tc)+We*Rearrow_forwardBusiness risk is the combination of __________ risk and __________ risk. A. operating, financial B. operating, sales C. financial, sales D. sales, defaultarrow_forward
- 3) Which three of the following factors are most likely to lead to a stable dividend policy? A) Clientele preferencesB) Dividends as a residual; the availability of positive NPV projectsC) Mechanisms highlighted by agency theoryD) Signallingarrow_forwardCorporate insurance purchases will primarily * affect the firm's (ihë 1) cost of capital risk premium expected net cash flows all of the above Oarrow_forward(c) One reason for paying dividend is the “clientele effect". Explain how this affects the decision to pay dividend? eearrow_forward
- Participation #7: Why are ROE and EPS such important measures of performance to investors?arrow_forward11. Which of the following security holders receives a lower returns with low risk? . T-Bill B. Common shareholders C. Stakeholders D. Creditors 12. The advantage of a company compared a sole trader as form of business organisation is: A. Quick decision making B. Access to external professional management skills C. Use of own funds D. Inability to access external funds Thank you!!!arrow_forward1. Explain the concept of of Principle no. 2 of Financial Management "There is risk-Return Trade Off2.Give examples of financial decisions faced by companies and individualsarrow_forward
- Why do the clientele effect and the information contenthypotheses imply that investors prefer stable dividends?arrow_forwardDefine signaling hypothesis (dividends)arrow_forwardWhat do the three theories indicate regardingthe actions management should take withrespect to dividend payouts?arrow_forward
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Dividend disocunt model (DDM); Author: Edspira;https://www.youtube.com/watch?v=TlH3_iOHX3s;License: Standard YouTube License, CC-BY