Reference no: EM13948600
Restrictions on dividend payments based on the liquidity postion of the firm.
Based on your understanding of constraints on dividend payments, identify the type of constraint this condition represents. Assume that all other factors held constant.
IN the table, identify which factors tend to favor high or low payout ratios:
Taxes on capital gains are deferred until the capital gain is realized, but taxes on dividends are due in the year in which they are received.
A firm has an established credit line for access to external sources of funding
Due to inflationary environment, a firm has to increase cash balances to meet the rising of accounts payable and other short-term liabilities.
Having the ability to accelerate or delay projects makes it __for a firm to adhere to a stable dividend policy? A. Harder B. Easier
If management is concerned with keeping control of the company, it will be likely to retain ___ earnings than it otherwise would to avoid diluting control by issuing new stock to raise capital. A. more or B. Less
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What is the company target debt-equity ratio
: Fama’s Llamas has a weighted average cost of capital of 10.6 percent. The company’s cost of equity is 14 percent, and its pretax cost of debt is 8.6 percent. The tax rate is 38 percent. What is the company’s target debt−equity ratio?
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Shares in a investment grade bond fund
: James bought shares in a investment grade bond fund. Assume that modified duration of the bonds in the portfolio is 14 years. The average maturity of the bonds is 23.5 years and the fund has a YTM of 4%. If the NAV of the fund’s shares is $10, if the..
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Risk-free rate-the expected market rate of return
: The risk-free rate is 3%, the expected market rate of return is 9%, if you expect a stock with a beta of 1.5 to offer a rate of return of 12%, you should. You are considering acquiring a common stock that you'd like to hold for one year. You expect t..
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Financial management in firms operating entirely
: Financial Management--- List six major factors that distinguish financial management in firms operating entirely within a single country from those that operate in several different countries. What are some of the common barriers to entry for a firm ..
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Dividend payments based on the liquidity postion of the firm
: Restrictions on dividend payments based on the liquidity postion of the firm. Based on your understanding of constraints on dividend payments, identify the type of constraint this condition represents. Assume that all other factors held constant. IN ..
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Which method of financing will maximize its eps
: Dundee Company has a total value of $74 million. Its stock sells at $32 a share. At present, it has a loan of $10 million at 8% interest. It needs $3 million in additional capital. Which method of financing will maximize its EPS? What is the probabil..
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Capital structure-Find the WACC
: Aberdeen Company has the following capital structure. The risk-free rate is 5% and the expected return on the market is 12%. The tax rate of Aberdeen is 32%. Find the WACC of Aberdeen.
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What is the present value of growth opportunities
: A stock is expected to pay a dividend of $1.000 next year. Dividends are expected to grow at the rate of 3% per year after that. Earnings next year are expected at $1.50. The risk-free rate of return is 2% and the market risk premium is 5%. What is t..
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What is the maximum capital budget-expected net income
: ABC telecom in is expected to generate $240 million in net income over the next year. ABC Telecom INC stockholders expect it to maintain its long run dividend payout ratio of 40% earnings. If the company wants to maintain its current capital structur..
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