UPENN: LOOSE LEAF CORP.FIN W/CONNECT
17th Edition
ISBN: 9781260361278
Author: Ross
Publisher: McGraw-Hill Publishing Co.
expand_more
expand_more
format_list_bulleted
Question
Chapter 19, Problem 9QP
Summary Introduction
To determine: The last year’s dividend per share.
Introduction: The term dividends allude to that portion of proceeds of an organization which is circulated by the organization among its investors. It is the remuneration of the investors for investments made by them in the shares of the organization.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Suppose you know that a company's stock currently sells for $66.60 per share and the required return on the stock is 11 percent. You
also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If It's the company's policy
to always maintain a constant growth rate In its dividends, what is the current dividend per share?
Note: Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
Dividend per share
Suppose Stark Ltd. just issued a dividend of $2.59 per share on its common stock. The company paid dividends of $2.25, $2.34, $2.41, and $2.52 per share in the last four years.
a.
If the stock currently sells for $70, what is your best estimate of the company’s cost of equity capital using the arithmetic average growth rate in dividends? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
a.
What if you use the geometric average growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Suppose you know that a company's stock currently sells for $65.90 per share and the
required return on the stock is 12 percent. You also know that the total return on the
stock is evenly divided between capital gains yield and dividend yield.
If it's the company's policy to always maintain a constant growth rate in its dividends,
what is the current dividend per share? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
Dividend per share
Chapter 19 Solutions
UPENN: LOOSE LEAF CORP.FIN W/CONNECT
Ch. 19 - Dividend Policy Irrelevance How is it possible...Ch. 19 - Stock Repurchases What is the impact of a stock...Ch. 19 - Dividend Policy It is sometimes suggested that...Ch. 19 - Dividend Chronology On Tuesday, December 8,...Ch. 19 - Prob. 5CQCh. 19 - Prob. 6CQCh. 19 - Dividends and Stock Price Last month, Central...Ch. 19 - Prob. 8CQCh. 19 - Dividend Policy For initial public offerings of...Ch. 19 - Investment and Dividends The Phew Charitable Trust...
Ch. 19 - Use the following information to answer the next...Ch. 19 - Stock Repurchases How do you think this tax law...Ch. 19 - Dividends and Stock Value The growing perpetuity...Ch. 19 - Bird-in-the-Hand Argument The bird-in-the-hand...Ch. 19 - Dividends and Income Preference The desire for...Ch. 19 - Dividends and Clientele Cap Henderson owns Neotech...Ch. 19 - Prob. 17CQCh. 19 - Prob. 18CQCh. 19 - Prob. 19CQCh. 19 - Prob. 20CQCh. 19 - Prob. 1QPCh. 19 - Stock Dividends The owners equity accounts for...Ch. 19 - Prob. 3QPCh. 19 - Stock Splits and Stock Dividends Roll Corporation...Ch. 19 - Prob. 5QPCh. 19 - Share Repurchase In the previous problem, suppose...Ch. 19 - Prob. 7QPCh. 19 - Prob. 8QPCh. 19 - Prob. 9QPCh. 19 - Prob. 10QPCh. 19 - Prob. 11QPCh. 19 - Prob. 12QPCh. 19 - Stock Repurchase Flychucker Corporation is...Ch. 19 - Prob. 14QPCh. 19 - Prob. 15QPCh. 19 - Prob. 16QPCh. 19 - Prob. 17QPCh. 19 - Prob. 18QPCh. 19 - Prob. 19QPCh. 19 - Prob. 20QPCh. 19 - Prob. 1MCCh. 19 - Jessica believes that the company should use the...Ch. 19 - Prob. 3MCCh. 19 - Another option discussed by Tom, Jessica, and...Ch. 19 - Prob. 5MCCh. 19 - Does the question of whether the company should...
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
- The Castle Company recently reported net profits after taxes of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million a year. The company’s stock currently trades at $60 per share. Compute the stock’s earnings per share (EPS). What is the stock’s P/E ratio? Determine what the stock’s dividend yield would be if it paid $1.75 per share to common stockholders.arrow_forwardSuppose you know that a company’s stock currently sells for $54 per share and the required return on the stock is 9 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it’s the company’s policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)arrow_forwardQ: Corn, Inc., has an odd dividend policy. The company has just paid a dividend of $6 per share and has announced that it will increase the dividend by $2 per share for each of the next four years, and then never pay another dividend. suppose you require an 11 percent return on thecompany’s stock.Required:a) how much will you pay for a share today?b) Is the value of this stock dependent upon how long you plan to hold it? would this affect the value of the stock today?c) What happens if a company has a constant growth g that exceeds its cost of capital ks?Will many stocks have expected g> ks in the short run? In the long run (that is, forever)?arrow_forward
- Suppose Wacken, Limited, just issued a dividend of $1.93 per share on its common stock. The company paid dividends of $1.60, $1.68, $1.75, and $1.86 per share in the last four years. a. If the stock currently sells for $50, what is your best estimate of the company's cost of equity capital using the arithmetic average growth rate in dividends? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. What if you use the geometric average growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Cost of equity b. Cost of equity % %arrow_forwardSuppose Wacken, Limited, just issued a dividend of $1.52 per share on its common stock. The company paid dividends of $1.20, $1.26, $1.33, and $1.44 per share in the last four years. 1. If the stock currently sells for $55, what is your best estimate of the company's cost of equity capital using the arithmetic average growth rate in dividends? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 1. What if you use the geometric average growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) es Cost of equity % 1 Cost of equityarrow_forwardSuppose you know that a company's stock currently sells for $53.47 per share and the required return on the stock is 8.5 percent. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If it's the company's policy to always maintaina constant growth rate in its dividends, what is the current dividend per share? Answer to two decimals.arrow_forward
- Company A distributed a dividend of $ 4 per share last year. If the company is expected to distribute the same amount of dividends in the following years and the least profitability rate investors expect is 10%, what is the real value of the shares of company A? If the stock of this company is currently trading at 30 USD, can the relevant stock be purchased?a) 45 and must be purchasedb) 70.83 and must be purchasedc) 70.83 and should not be boughtd) 40 and should not be bought e) 40 and must be purchased ===================== How much money will be accumulated at the end of the 2nd year in our account where we deposit 700 USD at the beginning of each year with 9% interest?a) 4599,67b) 2750,25c) 1594,67d) 4200,25e) 5381,25 -------------------- How many USD should a person who constantly wants to receive 4500 USD at the end of each year invest in a bank that pays 12.5% interest today?a) 24000b) 40000 c) 10000d) 36000e) 28000arrow_forwardAssume that American Eagle Outfitters (AEO) will pay $0.18/share dividend next year. The dividend is expected to grow at a 15.5 percent rate. At the current stock price of $13.72/share, what is the return shareholders are expecting? Group of answer choices 16.81% 15.50% 17.08 % 17.32% None of these are correctarrow_forwardelizabeth eaarns $9.50 a share, sells for $90, and pays a $6 per sharedeviden. the stock is split two for one and a $3 pers share cash dividend is diclared. what will be the new price of the stock? if the firms total earnings to do not change, what is the payout ratio before and after stock split?arrow_forward
- What effect will a two-for-one stock split have on the following items found on a firm's financial statements? a. Earnings per share $5.00. Round your answer to the nearest cent. Initial amount $5.00 $ b. Total equity $10,000,000. Round your answer to the nearest dollar. Initial amount $ New amount Initial amount $4,000,000 New amount $10,000,000 c. Long-term debt $4,600,000. Round your answer to the nearest dollar. Effect $ New amount Effect Initial amount $4,600,000 $ d. Additional paid-in capital $1,689,000. Round your answer to the nearest dollar. Effect New amount $ New amount -Select- Effect New amount Initial amount $1,689,000 e. Number of shares outstanding 800,000. Round your answer to the nearest whole number. Initial amount 800,000 f. Earnings $4,000,000. Round your answer to the nearest dollar. Effect -Select- -Select- -Select- Effect -Select- -Select-arrow_forwardSuppose Wacken, Limited, just issued a dividend of $2.73 per share on its common stock. The company paid dividends of $2.31, $2.39, $2.48, and $2.58 per share in the last four years. a. If the stock currently sells for $43, what is your best estimate of the company's cost of equity capital using the arithmetic average growth rate in dividends? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.., 32.16.) b. What if you use the geometric average growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Cost of equity b. Cost of equityarrow_forwardsuppose wacken, limited, just issued a dividend of $2.73 per share on its common stock. the company paid dividends of $2.31, $2.39, $2.48, and $2.58 per share in the last four years. a. if the stock currently sells for $43, what is your best estimate of the company’s cost of equity capital using the arithmetic average growth rate in dividends? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. what if you use the geometric average growth rate?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENTPfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage LearningCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Pfin (with Mindtap, 1 Term Printed Access Card) (...
Finance
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Dividend explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Wy7R-Gqfb6c;License: Standard Youtube License