Fundamentals of Corporate Finance
Fundamentals of Corporate Finance
11th Edition
ISBN: 9780077861704
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Chapter 19, Problem 6CRCT
Summary Introduction

To discuss: The reason for considering the dividend with the short-term interest rates as an attractive short-term investments for the firms that have more cash.

Introduction:

Short-term investments are the part of the accounts in the section of current assets of the balance sheet of the company.

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CH6 # 1 The ABC Company has a stable dividend policy ($2 per share per year). It also has a policy of not raising new capital from the market. The policy is to invest the available funds after payment of the dividends (excess cash is invested in marketable securities). What does this imply about the use of the present value method of making investment decisions?
p12 According to the pecking order theory, managers are less likely to use which of the following sources of financing? Retained earnings New preferred stock New common stock New debt
Q2. Many corporations do not pay dividends, why are investors willing to by their stock?

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Fundamentals of Corporate Finance

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