Question about dividend policy

Assignment Help Finance Basics

Reference no: EM1373172

For each of the following 4-groups of companies, state whether you would expect them to distribute a relatively high or low proportion of current earnings and whether you would expect them to have a relatively high or low price-earnings ratio.

[A] High risk Firms.
[B] Firms that have recently experienced a temporary decline in profits.
[C] Firms that expect to experience a decline in profits.
[D] 'Growth' companies with valuable future investment opportunities.

'Risky firms tend to have lower target payout ratios and more gradual adjustment rates.' Describe what is meant by this statement. Why do you think it is so?

Reference no: EM1373172

Questions Cloud

Find market value of the bonds : The Bonds of Microfood, Inc. carry a 10 percent annual coupon, have a $1,000 face value, and nature in 4 years. Bonds of equivalent risk yield 7 percent.

Market portfolio using the capital market line : A portfolio that combines the risk-free asset and the market portfolio have an expected return of 25% and a standard deviation of 4%. The risk-free rate is 5%, and the expected return on the market portfolio is 20%.

Difference between the book value and market value : We discussed cash flow in DQ1. Another measure of value is the firm's assets less liabilities or investor's equity. We call this book value of the company.

What is the deadweight loss from the quota : What are the losses to U.S. consumers, gains to U.S. producers, and deadweight loss and what quota level would have the equivalent effect on price as the $6 tariff

Question about dividend policy : For each of the following 4-groups of companies, state whether you would expect them to distribute a relatively high or low proportion of current earnings and whether you would expect them to have a relatively high or low price earnings ratio.

Question about ratio analysis : Examine each company's financial performance for the two most recent years presented. Your analysis should include at least 8-from the following list, Quick ratio; Current ratio;

Determine the expected return on stock : Assume the expected return on the market portfolio is 14.7% and the risk free rate is 4.9%. Morrow Inc. stock has a beta of 1.3 Suppose the capital asset pricing model holds.

Assimilate all of the marketing readings into a cogent guide : Assimilate all of the readings throughout the semester into a cogent guide for thinking about Marketing and review your readings throughout the course and make a list of the key concepts

Question related to risk : Suppose you have a friend who is always getting into trouble by taking unwise risks. What advice, based on what you have learned in this course, would you give this person?

User Account

All Pages