Reference no: EM132500897
Consolidated Pasta is currently expected to pay annual dividends of $10 a share in perpetuity on the 1.9 million shares that are outstanding. Shareholders require a 10% rate of return from Consolidated stock.
a. What is the price of Consolidated stock? (Do not round intermediate calculations.)
Stock Price_________________
b. What is the total market value of its equity? (Enter your answer in millions.)
Market value of equity ______________million
Consolidated now decides to increase next year's dividend to $20 a share, without changing its investment or borrowing plans. Thereafter the company will revert to its policy of distributing $10 million a year.
c. How much new equity capital will the company need to raise to finance the extra dividend payment? (Enter your answer in millions.)
New equity ___________________ million
d. What will be the total present value of dividends paid each year on the new shares that the company will need to issue? (Enter your answer in millions.)
Present value___________ million
e. What will be the transfer of value from the old shareholders to the new shareholders? (Enter your answer in millions.)
Transfer of value ___________million
f. Is this figure more than, less than, or the same as the extra dividend that the old shareholders will receive?
More than ________
Less than _______
Th same ______
|
What is the effective annual interest rate
: What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years?
|
|
How many cash flows there will be
: If you deposit 100$ at the end of every month(in one month from today) in a bank that offers 2% compounded monthly and you will continue doing so 20 years:
|
|
Calculate the total utility cost for the month of april
: Assume that 500 labor hours are budgeted for the month of April. Calculate the total utility cost for the month of April. Zinc Company constructed
|
|
How principalism applied according to christian worldview
: This part includes questions, to be answered in a total of 500 words, that describe how principalism would be applied according to the Christian worldview.
|
|
What is the total market value of its equity
: Consolidated Pasta is currently expected to pay annual dividends of $10 a share in perpetuity on the 1.9 million shares that are outstanding. Shareholders
|
|
Compute net cash flow from operating activities
: $42,000 during 2018. In computing net cash flow from operating activities under the indirect method, net income for 2018 should be
|
|
Determine the variable cost per unit
: Fixed costs are $142,800, and income from operations is $1,285,200. Determine the Variable cost per unit, Unit contribution margin
|
|
Calculate the npv for project-squaw valley recreation
: Squaw Valley Recreation is in the process of analyzing a new three year project to grow their business. At the beginning of this project, Squaw Valley
|
|
BIT 100 Introduction to Information Technology Skills
: BIT 100 Introduction to Information Technology Skills Assignment Help and Solution - Emirates College of Technology, UAE. Questions 1: Forms of e-commerce
|