Statements related to dividend policy

Assignment Help Financial Management
Reference no: EM13953687

Which one of the following statements related to dividend policy is correct?

The primary question related to dividend policy is whether or not a firm should ever pay a dividend.

Both dividends and dividend policy are irrelevant.

Dividend policy focuses on the timing of dividend payments.

Homemade dividends increase the importance of a firm's dividend policy decisions.

Whether or not a firm ever pays a dividend is irrelevant to equity valuation.

Reference no: EM13953687

Questions Cloud

Expected to pay an annual dividend : The Hen House is expected to pay an annual dividend of $2.10 a share next year. The company recently announced that future dividends will increase by 2.5 percent annually. The market price is $51.30 a share. What is the cost of equity?
Firm has a debt-equity ratio : A firm has a debt-equity ratio of .55 and a tax rate of 35 percent. Its cost of equity is 10.6 percent and its pre-tax cost of debt is 8.1 percent. What is the firm’s WACC?
What is the firms WACC given a tax rate : Mullineaux Corporation has a target capital structure of 41 percent common stock, 4 percent preferred stock, and 55 percent debt. Its cost of equity is 18 percent, the cost of preferred stock is 6.5 percent, and the pre-tax cost of debt is 8.5 percen..
A firms cost of capital : A firm's cost of capital:
Statements related to dividend policy : Which one of the following statements related to dividend policy is correct?
A firms overall cost of equity : A firm's overall cost of equity is:
The dividend market is in equilibrium when : The dividend market is in equilibrium when:
Divisional WACC approach to analyze projects : Suppose your firm has decided to use a divisional WACC approach to analyze projects. The firm currently has four divisions, A through D, with average betas for each division of 0.8, 1.0, 1.5, and 1.7, respectively.
Pension fund manager is considering three mutual funds : A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long term government and corporate bond, and the third is a T-bill money market fund that yields a sure rate of 4.8. The correlation between the fund..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the market value of the outstanding preferred stock

Jones Design wishes to estimate the value of its out-standing preferred stock. The preferred issue has an $80 par value and has a dividend rate of 8 percent. Similar-risk preferred stocks are currently earning a 12% annual rate of return. What is the..

  An asset has had an arithmetic return-geometric return

An asset has had an arithmetic return of 10.5 percent and a geometric return of 8.5 percent over the last 94 years. What return would you estimate for this asset over the next 12 years? 18 years? 32 years?

  The amount of debt increases in firms capital structure

In the traditional approach to capital structure, as the amount of debt increases in a firm's capital structure,

  Equal annual instalments

Debbie borrows $3,500 from the bank at 12 percent annually compounded interest to be repaid in four equal annual instalments. What is her annual payment? What is the interest paid in the first year. What is the principal paid in the first year?

  What is the price of company bond

Smith’s company is selling a bond with the following features: 5 years to maturity, face value of $1000, coupon rate of 2% (semiannual coupons) and yield to maturity of 4% APR. What is the price of Smith’s company bond?

  Analysis period and no salvage value

A steam boiler is needed as part of the design of a new plant. The boiler can be fired by natural gas, fuel oil, or coal. A decision must be made on which fuel to use. An analysis of the costs shows that the installed cost, with all controls, would b..

  How can the case manager assist the client

How can the case manager assist the client in transitioning to therapy when it is necessary?

  Current YTM of the bonds and after-tax cost of debt

You are analyzing the after-tax cost of debt for a firm. You know that the firm’s 12-year maturity, 9.10 percent semi-annual coupon bonds are selling at a price of $767.17. These bonds are the only debt outstanding for the firm. What is the current Y..

  Standard deviation-portfolio-stock beta

In isolation, stock A’s standard deviation ( σ ) = 10%, stock B’s σ = 15%, and stock C’s σ = 20%. In a portfolio, stock A’s beta ( β ) = 2, stock B’s β = 1.5, and stock C’s β = 1.0. Which of the following is true?

  What is the expected return of the stock

The Bumble Bee. Corp. has a beta of 1.45. You observed the risk free rate of return to be 6.5% and the market risk premium of 5%. What is the expected return of the stock?

  How the financing decision can influence sensitivity of npv

Impact of financing on NPV. Explain how the financing decision can influence the sensitivity of the net present value to exchange rate forecasts.

  What is the value of the bondholders call option

A 10-year maturity convertible bond with a face value of $1,000 and a 6% coupon on a company with a bond rating of Aaa is selling for $1,050. The bond pays interest annually. Each bond can be exchanged for 20 shares, and the stock price currently is ..

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