How would you respond to your study buddies

Assignment Help Financial Management
Reference no: EM131347698

You are studying for the final with your buddies Bert and Ernie. Bert says “everyone knows that dividends are much better than repurchases.” Ernie replies “Well, I do remember that dividends are a sign of management being confident about the firm because they have to pay them, but I’m not so sure that we can say that they are always better.” How would you respond to your study buddies? (Bullet point answers).

Reference no: EM131347698

Questions Cloud

Find the cash flow from assets in the last year of project : A fixed asset for a 3-year project costs $1, 800 and is classified as a 3-year asset under MACRS; its salvage value will be $300 at the end of the project. Each year the project is expected to generate $1, 920 in sales and $980 in cost of goods sold...
Round table rental yards provides construction equipment : Round Table Rental Yards provides construction equipment, trailers, etc., on short-term rentals. Historically, Art, the owner, has purchased the items that he rents out, but his business has been expanding so rapidly that he is considering both strai..
Difference between the book and marketvalues of bond : A 20-year 10% annual coupon bond has a par value of $1,000.When you originally purchased this bond, the effective annual interest ratewas 8%. Suppose that five years after purchase, the effective annual interestrate is 10.5%. What is the absolute dif..
Should the project be accepted or rejected : Compute the IRR for Project F. The appropriate cost of capital is 13 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Project F Time: 0 1 2 3 4 Cash flow –$11,700 $4,200 $5,030 $2,370 $3,000 IRR % Should..
How would you respond to your study buddies : You are studying for the final with your buddies Bert and Ernie. Bert says “everyone knows that dividends are much better than repurchases.” Ernie replies “Well, I do remember that dividends are a sign of management being confident about the firm bec..
Costs and benefits of adding debt to the capital structure : In the context of the static tradeoff theory list and describe the costs and benefits of adding debt to the capital structure. List and describe 3 reasons why might some firms have zero debt?
Expectation theory of term structure of interest rates holds : Suppose we observe the following rates: 1R1 = 5%, 1R2 = 9%. If the unbiased expectations theory of the term structure of interest rates holds, what is the 1-year interest rate expected one year from now, E(2r1)? (Do not round intermediate calculation..
Outline what the fama-french three factor model : Your friend Danni is working in the CFO’s office for MacroHard Inc. Danni’s boss uses the CAPM to estimate the firm’s cost of capital, but Danni remembers from FINA 4210 the Fama-Fench 3 factor model. Outline what the Fama-French 3 factor model is.
Time horizon-tax considerations,and inflation concerns : Gary Lee Weinrib (Mr. W) is a 60 year old divorced musician. He is planning on retiring in the next two years. He will quit touring and recording. He is in reasonably good health. As a successful musician, he has amassed a solid portfolio. Write an I..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the market risk premium

The market has an expected rate of return of 9.2%. the long-term government bond is expected to yield 4.3% and the U.S Treasury bill is expected to yield 3.5% the inflation rate is 3.1% what is the market risk premium?

  What are the firms interest tax savings

(Computing interest tax savings) Dharma Supply has earnings before interest and taxes (EBIT) of $544000, interest expenses of $274000, and face a corporate tax rate of 34 percent.

  The yield on preferred stock normally is higher

The yield on preferred stock normally is higher when a. a stock is freely callable versus being noncallable. b. dividend rates are low. c. the quality is higher versus a lower quality preferred. d. market interest rates are lower versus when they are..

  Appropriate discount rate-claim to these cash flows

You are expecting to receive $300 at the end of each year in years 3, 4, and 5, and then 500 each year at the end of each year in years 10 through 25, inclusive. If the appropriate discount rate is 6.5 percent, for how much would you be able to sell ..

  Create a schedule showing the cash inflows and outflows

Create a schedule showing the cash inflows (including interest) and outflows of this fund. How much remains on Spencer's twenty-first birthday?

  Target capital structure of preferred stock and debt

Shi Importers' balance sheet shows $300 million in debt, $50 million in preferred stock, and $250 million in total common equity. Shi's tax rate is 40%, rd = 7%, rps = 7.9%, and rs = 14%. If Shi has a target capital structure of 30% debt, 5% preferre..

  Number of periods of a single payment

If you deposit money today in an account that pays 8.5% annual interest, how long will it take to double your money? Round your answer to the nearest whole number

  Provide protection against the value of the portfolio

Suppose your portfolio mirrors S&P500 index and is valued currently at $1,000,000. The S&P 500 index is currently at 2,000. What action is needed to provide protection against the value of the portfolio falling below $950,000 in 6 months?

  What is the likelihood of a type 1 error

What is the likelihood of a Type 1 error if the null hypothesis is actually true? What is the likelihood of a Type 1 error if the null hypothesis is actually false?

  The expected interest rate on one-year treasury security

The interest rate on a two-year treasury security is 4.7%, and the interest rate on a one-year treasury security is 6.06%. What is the expected interest rate on a one-year treasury security one year from now? State you answer as a percentage to two d..

  Rate of return on the bonds realized by the investor

One year ago, a bank invested a sum of SEK 1 million in newly issued bonds, denominated in the same currency, with maturity five years hence. The bonds pay a yearly interest coupon calculated at the rate of 5% , and were issued at par. What would be ..

  Which financing option results in the better roe

Assuming a 40 percent tax rate and no other changes, should Tracey buy the two coffee houses? Why or why not? Which financing option results in the better ROE?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd