Illustrate what is the ex-dividend price of novis stock

Assignment Help Business Management

Reference no: EM13105438

Q. The net income of Novis Corporation is $45000. The company has 20000 shares and a 100 percent payout policy. The expected value of the company one year from now is $1635000. The appropriate discount rate for Novis is 12 percent and the dividend tax rate is zero.

a. Illustrate what is the current value of the company assuming the current dividend has not yet been paid?

b. Illustrate what is the ex-dividend price of Novis's stock if the board follws its current policy?

c. At the dividend declaration meeting, several board members claimed that the dividend is too meager and is probably depressing Novis's price. They proposed that novis sell enough new shares to finance a $4.60 dividend.

i. Comment on the claim that the low dividend is depressing the stock price. Support your argument with calculations.

ii. If the proposal is adopted, at illustrate what price will the new shares sell? Explain how many will be sold?

Reference no: EM13105438

Questions Cloud

Illustrate what are economics of venture capital business : Illustrate what are the economics of the venture capital business? Assume that Forte is a “top quartile” fund in terms of performance. Illustrate what will the cumulative pay checks and distributions to the limited partners and the general partner..

Computing confidence interval for mean : The standard deviation of test scores on a certain achievement test is 11.4. A random sample of 100 scores on this test had a mean of 71.2. Based on this sample, find a 90% confidence interval for the true mean of all scores. Complete the below:

Determine the confidence interval of the true mean : A food snack manufacaturer samples 11 bags of pretzels off the assembly line and weighs their contents. If the sample mean is 15.2 oz. and the sample standard deviation is 0.40 oz., find the 95% confidence interval of the true mean.

Determine the possible algebraic signs : An unstrained horizontal spring has a length of 0.34 m and a spring constant of 290 N/m. Two small charged objects are attached to this spring, one at each end. The charges on the objects have equal magnitudes.

Illustrate what is the ex-dividend price of novis stock : Illustrate what is the ex-dividend price of Novis's stock if the board follws its current policy? At the dividend declaration meeting, several board members claimed that the dividend is too meager and is probably depressing Novis's price. They prop..

Explain interrelatedness of several indigenous religions : As recommended by Fisher (2005) in Living Religions, let the interrelatedness of everything in cosmos as it is expressed in several indigenous religions.

Nandi a law banning all commercial billboards : Nandi a law banning all commercial billboards along state highways to rid the state of highways of billboards which are offensive to citizens.

Description of confidence interval-sample size : An election poll reported that a candidate had an approval rating of 48% with a margin of error E of 3%. Construct a confidence interval for the proportion of adults who approve of the candidate.

What is the horizontal distance x between the two balloons : what is the horizontal distance x between the two balloons.

User Account

All Pages