Assume perfect capital market

Assignment Help Financial Management

Reference no: EM132033186

Friends Inc. is an all-equity firm worth $4.5 million and has 125,000 shares outstanding. The firm has announced that it will pay out $500,000 of cash dividends next month. Before the dividend announcement, the stock price was 36$ per share. A shareholder of the firm, who owns 2,000 shares, would like to receive $10,000 cash income next month. How many shares would the shareholder need to bu or sell to receive the desired cash income next month? Assume a perfect capital market.

Reference no: EM132033186

Questions Cloud

Creates lien on taxable property : Because a levy of property taxes creates a lien on taxable property, Create a cash flow that has a rate of return at 10% and a rate of return at 20%.

What are the portfolio weights of each stock : If you own 500 shares of Alaska Air at $46.48, 550 shares of Best Buy at $54.92, and 300 shares of Ford Motor at $8.66, what are the portfolio weights of each s

What is the payoff of a collar involving a long call : What is the payoff of a collar involving a long call and short put at the same strike price of $1.20/£?

Find the modified rate of return for this cash flow : Find all rates of return for this cash flow. Find the modified rate of return for this cash flow.

Assume perfect capital market : sell to receive the desired cash income next month? Assume a perfect capital market.

Create a data file on your computer : MACJ-590:You have learned how to collect data, enter data, code data and use data files provided to complete analysis.

Project would require initial investment in equipment : What is the NPV of project A. The project would require an initial investment in equipment of 73,000 dollars and would last for either 3 years

How would you respond if you were running such a company : Lives depend on products created by some companies. Do these companies have a greater responsibility to work to benefit the consumer more than themselves?

Compare and contrast two of the tales in the canterbury tale : Develop a compare/contrast essay of 750 to 1000 words minimum/maximum with an introduction, body, and conclusion. Include a works cited page.

User Account

All Pages