a. How would a firm′s decision to pay out a higher percentage of its earnings as dividends affect each of the following? 1. The value of its long-term warrants 2. The likelihood that its convertible bonds will be converted 3. The likelihood that its warrants will be exercised b. If you owned the warrants or convertibles of a company, would you be pleased or displeased if it raised its payout rate from 20% to 80%? Why?
Fundamentals of Financial Manageme...
Fundamentals of Financial Manageme...
a. How would a firm′s decision to pay out a higher percentage of its earnings as dividends affect each of the following?
- 1. The value of its long-term warrants
- 2. The likelihood that its convertible bonds will be converted
- 3. The likelihood that its warrants will be exercised
b. If you owned the warrants or convertibles of a company, would you be pleased or displeased if it raised its payout rate from 20% to 80%? Why?
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