Reference no: EM13877950
Over the last 10 years, a firm has had the earnings per share shown in the following table.
Year - Earnings per share - Year - Earnings per share
2015 - $4.00 - 2010 - $2.40
2014 - 3.80 - 2009 - 1.20
2013 - 3.20 - 2008 - 1.80
2012 - 2.80 - 2007 - 0.50
2011 - 3.20 - 2006 - 0.25
a. If the firm’s dividend policy were based on a constant payout ratio of 40% for all years with positive earnings and 0% otherwise, what would be the annual dividend for each year?
b. If the firm had a dividend payout of $1.00 per share, increasing by $0.10 per share whenever the dividend payout fell below 50% for two consecutive years, what annual dividend would the firm pay each year?
c. If the firm’s policy were to pay $0.50 per share each period except when earnings per share exceed $3.00, when an extra dividend equal to 80% of earnings beyond $3.00 would be paid, what annual dividend would the firm pay each year?
d. Discuss the pros and cons of each dividend policy described in parts a through c.
|
Using the spss 2 × 3 anova data file for module 4
: Using the SPSS 2 × 3 ANOVA data file for Module 4 (located in Topic Materials), answer the following questions. NOTE: Helpful hints are provided here for you to use while answering these questions. There is no separate answer sheet/guide to use while..
|
|
Biometric authentication methods for online transactions
: Biometric authentication methods for online transactions, The physical attributes inherent in biometric authentication methods raise interesting problems
|
|
What is future value of these payments at end of five year
: You expect to receive an annuity of $1,000 per year for the next five years. The market rate of interest is 12%. Assuming that you do not spend any of the income at any other time, what is the future value of these payments at the end of five years? ..
|
|
Most loans are a form of perpetuity
: PV of annuity due is always smaller than the PV of ordinary annuity (assuming interest rate is greater than 0). FV of annuity due is larger than the FV of ordinary annuity (assuming interest rate is greater than 0). A perpetuity composed of $100 mont..
|
|
Discuss pros and cons of dividend policy described in parts
: Over the last 10 years, a firm has had the earnings per share shown in the following table. If the firm’s dividend policy were based on a constant payout ratio of 40% for all years with positive earnings and 0% otherwise, what would be the annual div..
|
|
Calculate values of bonds if your required rates of return
: Here are the data on $1000 par value bonds issued by Microsoft, GE Capital, and Morgan Stanley at the end of 2012. Assume you are thinking about buying these bonds as of January 2013. assuming interest is paid annually, calculate the values of the b..
|
|
Present value for fixed future investment goal decreases
: As interest rate increases, present value needed for fixed future investment goal decreases. Interest earned on both the initial principal and the interest reinvested from prior periods is called compound interest.
|
|
Discuss the effect of these lease agreements on leverage
: Some fast food restaurants have lease agreements where their rental payment is a nominal amount plus a percentage of sales, rather than a fixed monthly amount. Discuss the effect of these lease agreements on the leverage and risk of the company.
|
|
Corporation is evaluating the relevant cash flows
: A corporation is evaluating the relevant cash flows for a capital budgeting decision and must estimate the terminal cash flow. The proposed machine will be disposed of at the end of its usable life of five years at an estimated sale price of $2,000. ..
|