What is the share price of firm

Assignment Help Finance Basics
Reference no: EM132652970

The firm you are CEO of has a current period cash flow of 2.1 million and pays no dividend. The present value of the company's future cash flows is $17.5 million. The company is entirely financed with equity and there are 500,000 shares outstanding. Assume the dividend tax rate is zero.

What is the share price of your firm?

Suppose you and the board announce a plan to pay out 50 percent of the current cash flows as a dividend to its shareholders. How can a shareholder, who owns 1000 shares, achieve a zero pay-out policy on their own?

Reference no: EM132652970

Questions Cloud

Make Alpha Company General Journal entries for May : Selling price was $4,500. Freight charges related to this transaction of $200 were paid by Alpha Company. Make Alpha Company General Journal entries for May
Find journal article that addresses sexual orientation : Identify at least one journal article that addresses sexual orientation. Select an article that find especially relevant to you in your role as a social worker
Preparation of financial or statistical reports : List 15 considerations in the preparation of financial or statistical reports.
How much dividend lily fashion house can pay its shareholder : How much dividend Lily Fashion House can pay its shareholders this year and what is dividend payout ratio of the company. Assume the Residual Dividend Payout
What is the share price of firm : The present value of the company's future cash flows is $17.5 million. The company is entirely financed with equity and there are 500,000 shares outstanding
Contemporary political issues : The assumption underlying this argument is that equality is a good thing. And, of course, based upon Thomas Jefferson's statement
Compute how much is net income : The data are (complete) and provide the basis for preparation of an income statement. Compute how much is net income
How much cash should gina receive : They share profits in the ratio of 4:4:2. Assuming P3,000 cash is withheld for possible liquidation expenses, how much cash should Gina receive
Explain origin and development of texas constitution : Describe state and local political systems and their relationship with the federal government. Explain the origin and development of the Texas constitution.

Reviews

Write a Review

Finance Basics Questions & Answers

  Compute the overhead rate for each cost driver

a. Compute the overhead rate for each cost driver. b. An order for 50 ceramic teapots had the following requirements: How much overhead would be assigned to this order?

  What is maximum price you should be willing to pay for it

If your required rate of return for this stock is 14%, what is the maximum price you should be willing to pay for it?

  Movement along the demand curve

Does the following event constitute a shift in demand or movement along the demand curve

  Invest in equal annual amounts and alternatively

calculate the amount of money he would have to invest in equal annual amounts and alternatively, in equal monthly amounts starting at the end of the current.

  Three-quarters of its revenue from overseas markets

Coca-Cola, a well-known U.S. multinational company, derives about three-quarters of its revenue from overseas markets. It is thus highly likely that the company is exposed to currency risks. Investigate the company's exchange risk management polic..

  Debt or additional trade credit

If the company could receive the funds from a bank at a rate of 7.3%, interest paid monthly, based on a 365-day year, what would be the effective cost.

  The store has a marginal tax rate of 30 percent what is

a proposed expansion project is expected to increase sales of jl tickers store by 35000 and increase cash expenses by

  Which system should be chosen

Whichever one is chosen will be renewed indefinitely at the same cost and same OCF. Using a required return of 15%, which system should be chosen? (Show the numbers used to derive the answer.)

  What pretax amounts did s and l

S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On December 27, 2016, S&L purchased Coca-Cola common.

  What is the npv of the project

What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

  What would be examples of valid selection methods

What would be examples of valid selection methods used by the human resource department to ensure selecting the appropriate candidate for a job.

  Evaluate competitiveness within the company industry

In Chapter 3, we learned Michael Porter's Five-Forces Model to evaluate competitiveness within the company's industry. Porter's five forces include

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