What must the liquidating dividend be

Assignment Help Financial Management
Reference no: EM131016236

JJ Industries will pay a regular dividend of $2.90 per share for each of the next four years. At the end of four years, the company will also pay out a liquidating dividend. If the discount rate is 12 percent, and the current share price is $65, what must the liquidating dividend be?

Reference no: EM131016236

Questions Cloud

How much is the stock currently worth : Netscrape Communications does not currently pay a dividend. You expect the company to begin paying a $3 per share dividend in 14 years, and you expect dividends to grow perpetually at 4 percent per year thereafter. If the discount rate is 12 percent,..
Requires net working capital at the beginning of the year : A project requires net working capital at the beginning of the year to equal 20% of end-of-year sales. The project will produce $100, $150, $300, $200, and $200 in sales at the ends of years 1 through 5 respectively.
Initial outlay of cash against the present value of return : Having trouble understanding about Net Present Value. One of the reasons is that, It provides a concrete number that managers can use to easily compare an initial outlay of cash against the present value of the return. What does it mean?
Make all future deposits on the first day of the year : Two sisters each open IRAs in 2011 and plan to invest $3,000 per year for the next 30 years. Mary makes her first deposit on January 1, 2011, and will make all future deposits on the first day of the year. Jane makes her first deposit on December 31,..
What must the liquidating dividend be : JJ Industries will pay a regular dividend of $2.90 per share for each of the next four years. At the end of four years, the company will also pay out a liquidating dividend. If the discount rate is 12 percent, and the current share price is $65, what..
The coupon payment is the total compensation for interest : The coupon payment is the total compensation for interest.
Indicate the one with the least default risk : The following entities are planning to sell bonds; indicate the one with the least default risk?
Cost of retained earnings using the gordon model approach : Heavy Rain Corporation just paid a dividend of $4.36 per share, and the firm is expected to experience constant growth of 3.77% over the foreseeable future. The common stock is currently selling for $91.55 per share. What is Heavy Rain’s cost of reta..
Expected to remain constant for the life of the bond : You are considering two bonds. Bond A has a 8% annual coupon while Bond B has a 6% annual coupon. Both bonds are valued at the prevailing discount rate of 7% which is expected to remain constant for the life of the bond. Which of the following statem..

Reviews

Write a Review

Financial Management Questions & Answers

  Explain the microassessment of country risk

Microassessment. Explain the microassessment of country risk. How could such an assessment be used instead to adjust a project's estimated cash flows?

  Brokerage firm-what is the return on the stock

Karen just purchased a stock costing $33 on margin, paying $23 and borrowing the remainder from a brokerage firm at 15 percent annual interest. The stock pays an annual dividend of $2. If Karen sells the stock after one year at a price of $50, what i..

  How the npv new and change in npv is calculated

We are evaluating a project that costs $644,000, has an eight-year life, and has no salvage value. Assume that the depreciation is straight-line to zero over the life of the project. Sales are projected at $70,000 units per year. how the NPV new and ..

  Monthly payments for each option over the life of mortgage

To purchase a house for $80,000, a new couple has $12,000 available for down payment. get a new standard mortgage with 10% APR interest compounded monthly for a 30-year term. What is the effective rate for option 2 per year? Compute the monthly payme..

  Find the break-even points

Suppose that a company has fixed costs of 400 dollars and variable costs of 0.75x+1410 dollars per unit, where x is the number of units produced. Suppose further that the selling price of its product is 1500−0.3x dollars per unit. Find the break-even..

  What is the market value of the bond

A 20-year bond pays 6% on a face value of $1,000. If similar bonds are currently yielding 4.5%, what is the market value of the bond? Use annual analysis

  Sales over the past three months

Sequoia Furniture Company’s sales over the past three months, half of which are for cash, were as follows: March-$400,000/ April-$650,000/ May-$520,000 a) Assume that Sequoia’s collection period is 60 days. What would be its accounts receivable balan..

  Evaluating two different cookie-baking ovens

You are evaluating two different cookie-baking ovens. The Pillsbury 707 costs $69,500, has a 5-year life, and has an annual OCF (after tax) of –$11,200 per year. The Keebler CookieMunster costs $96,000, has a 7-year life, and has an annual OCF (after..

  Best estimate of the companys cost of equity

Suppose a firm just issued a dividend of $2.50 per share on its common stock. The firm's dividends have been growing a 5% rate. IF the stock currently sells for $65, what is your best estimate of the company's cost of equity?

  How does the delta of a call change if the stock price rises

Can the delta of a call option be greater than 1.0? Explain. Can it be less than zero? How does the delta of a call change if the stock price rises? How does it change if the risk of the stock increases?

  Centralized control over disbursements is assisted

Centralized control over disbursements is assisted by which of the following cash management techniques?

  How much net operating profit after taxes does the firm

Faisal Ahmed Enterprises has the following income statement. How much net operating profit after taxes (NOPAT) does the firm have?

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