Reference no: EM13971132
Which of the following statements is most correct?
According to the tax effect theory, investors prefer dividends and, as a result, the higher the payout ratio, the higher the value of the firm.
According to the dividend preference (bird-in-the-hand) theory, investors prefer cash to paper (stock), so if a company announces that it plans to repurchase some of its stock, this causes the price of the stock to increase.
According to the dividend irrelevance theory developed by Modigliani and Miller, stock dividends (but not cash dividends) are irrelevant because they “merely divide the pie into thinner slices.”
According to the information content, or signaling, hypothesis, the fact that stock prices generally increase when an increase in the dividend is announced demonstrates that investors prefer higher to lower payout ratios.
According to the textbook, the residual distribution policy is more appropriate for setting a company’s long-run target distributions than for determining the distribution on a year-to-year basis.
|
What is the cash flow to stockholders-operating cash flow
: Zigs Industries had the following operating results for 2011: sales = $31,140; cost of goods sold = $20,160; depreciation expense = $5,580; interest expense = $3,090; dividends paid = $1,850. At the beginning of the year, net fixed assets were $17,18..
|
|
Computer to function properly
: The guidance system of a ship is controlled by a computer that has three major modules. In order for the computer to function properly, all three modules must function. Two of the modules have reliabilities of .97, and the other has a reliability ..
|
|
Develop a plan to address the situation
: Analyze how this scenario affects the organization - identify why this division may have occurred. Examine two explicitly different scenarios that may have led to this condition.
|
|
About the stock split
: A stock split
|
|
According to tax effect theory-investors prefer dividends
: According to the tax effect theory, investors prefer dividends and, as a result, the higher the payout ratio, the higher the value of the firm. According to the dividend preference (bird-in-the-hand) theory, investors prefer cash to paper (stock), so..
|
|
Find magnitude electric field at fourth corner of rectangle
: What is the direction of this electric field (as an angle measured from the positive x-axis, within limits of -180 degree to 180 degree, with counterclockwise positive)? Answer in units of degree.
|
|
Minimum atrractive rate of return
: An energy efficient pump is proposed by a vendor. The pump will cost $45,000 installed, and will require $2,000 worth of maintenance each year for its life of 15 years. Energy costs will be $6,000 per year. A standard pump will cost $25,000 and will ..
|
|
Future value of annuity problem
: Future value of annuity problem- You deposit $5,000 into a retirement account at the end of the next 15 years earning 8% interest, what is the future value annuity of your retirement after 15 years? Please show work. I have seen several difference an..
|
|
Provide an alternative way for john to reach his goal
: John, has a goal of having $1,500,000 by the time he retires in 30 years. He plans to save $5,000 per year in accounts that will earn 10% per year. Will he achieve his goal, if he has $0 saved today? If not, how much will he have in 30 years? Provide..
|