What are consequences of the payment of share dividend

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1. Calculate the weighted average cost of capital (WACC) based on the following information: the equity multiplier is 1.66; the interest rate on debt is 13%; the required return to equity holders is 22%; and the tax rate is 35%.

2. What are the consequences of the payment of a share dividend on the share price?

3. Determine a firm’s “financial policy” multiplier based on the following information: sustainable growth rate = 30%; net profit = $120,000; net sales = $480,000; total assets = $960,000 and dividends = $48,000. Round your answer to 2 decimals. (a) 0.95 (b)2.40 (c) 4.00 (d) 6.00 (e) None of the above.

Reference no: EM131883845

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