Stock on the ex-dividend date if the dividend is declared

Assignment Help Financial Management

Reference no: EM132045009

The Mann Company belongs to a risk class for which the appropriate discount rate is 13 percent. Mann currently has 223,000 outstanding shares selling at $116 each. The firm is contemplating the declaration of a $3 dividend at the end of the fiscal year that just began. Assume there are no taxes on dividends. Answer the following questions based on the Miller and Modigliani model, which is discussed in the text.

a. What will be the price of the stock on the ex-dividend date if the dividend is declared? (Do not round intermediate calculations.)

Price of the stock $

b. What will be the price of the stock at the end of the year if the dividend is not declared? (Do not round intermediate calculations.)

Price of the stock $

c. If Mann makes $4.8 million of new investments at the beginning of the period, earns net income of $2.2 million, and pays the dividend at the end of the year, how many shares of new stock must the firm issue to meet its funding needs? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Number of shares

Reference no: EM132045009

Questions Cloud

Equal dividends in each of the next two years : If you would rather have equal dividends in each of the next two years, how many shares would you sell in one year?

Describe the selected health problem and the population : Identify predisposing, reinforcing, and enabling factors for behavior change based on the theoretical constructs from the preceding step.

How peers influenced the interviewee : How peers influenced the interviewee during his or her adolescent/young adult stage. What people and/or events influenced the interviewee's development.

Prepare the journal entry to record the bond issue : Ace Brick company issued $100,000 of 5-year bonds. Prepare the journal entry to record the bond issue on January, 20X1

Stock on the ex-dividend date if the dividend is declared : What will be the price of the stock on the ex-dividend date if the dividend is declared?

Explain your thoughts and feelings about each situation : Review the material on value orientation (activity, time, social relationships, human nature, person-nature relationship), individualism, and collectivism.

Describe considerations for leading multicultural teams : Describe the leadership approaches preferred in the cluster that will be visited. Describe considerations for leading multicultural teams.

After outputting one of the three messages : After outputting one of the three messages, next is to calculate the average of the 2 numbers and display it.

Find the predetermined oh rate per machine hour : Find the predetermined OH rate per machine hour that would allocate the current total overhead ($100,000) to the three product lines

User Account

All Pages