an equivalent dividend‚ or continue with a share repurchase could positively affect many aspects of your company. This capital restructure could improve your firm’s share value‚ cost of capital‚ debt coverage‚ earnings per share and voting control. Please refer to our analysis below and in the attached excel spreadsheet for consideration. Using Debt to Maintain Dividend In order to maximize shareholder value‚ one option to consider is issuing debt to pay out an equivalent dividend. It is important
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of $450‚000 valued at historical cost and $500‚000 stated at fair value. The difference was due to the increased value of buildings with a remaining life of 15 years. During 2007 and 2008 Stator reported net income of $25‚000 and $15‚000 and paid dividends of $10‚000 and $12‚000‚ respectively. Rotor uses the equity method. 1. Based on the preceding information‚ what amount of differential will be amortized annually? A. $0 B. $750 C. $1‚000 D. $2‚000 2. Based on the preceding information
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Rolta India Share Capital 161.33 161.33 161.33 161.33 161.19 Reserves & Surplus 2868.9 Net Worth Equity Dividend (%) 22.5 30 30 35 32.5 2383.5 2304.45 2142.23 1743.13 3030.23 2544.83 2465.78 2303.56 1904.33 Book Value (Rs) 187.83 157.74 152.84 142.79 118.14 250 7000 6000 200 5000 150 4000 Net Worth Book Value (Rs) Reserves & Surplus 3000 Share Capital Equity Dividend (%) 100 2000 50 1000 0 1 2 3 4 5 0 1 2 3 4 5 Debt Equity Ratio Close Price 0.81 0.86 0.87
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after interest and taxation: The profit after the deduction of taxes to the government and interest payments on loans is called net profit after interest and taxation. • Retained profit: This is the profit that is left over after a firm pays off dividends to its shareholders. • Economic profit: This profit is realized from a product when revenues generated from it are higher than the total opportunity cost of its input materials. • Accounting profit: This is the difference between revenues and accounting
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Chapter 3 Problem 60 Page 133 Dividend yield is the annual dividend per share a company pays divided by the current market price per share expressed as a percentage. A sample of 10 large companies provided the following dividend yield data (The Wall Street Journal‚ January 16‚ 2004). Company | Yield % | Company | Yield % | Altria Group | 5.0 | General Motors | 3.7 | American Express | 0.8 | JP Morgan Chase | 3.5 | Caterpillar | 1.8 | McDonald’s | 1.6 | Eastman Kodak | 1.9 | United Technology
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| | | |In its most recent financial statements‚ Newhouse Inc. reported $50 million of net income and $810 million of retained earnings. The previous retained earnings | | |were $780 million. How much in dividends was paid to shareholders during the year? (Brigham 79) | | | | |
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the current GEICO stock price of $55.75. This report attempts to determine a range of appropriate stock prices for GEICO. Using the Gordon dividend discount model‚ along with historical dividend information and projections by Value Line‚ we estimate the value of GEICO stock in the range of $58 to $80. A review of historical growth rates in GEICO dividends also lends credibility to the investment’s future potential. • Review of Warren Buffett’s investment record. While our analysis lends
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Course Project – Part 1 Task 1: Assessing loan options for AirJet Best Parts‚ Inc. 1. Assuming that AirJet Parts‚ Inc. is considering loans from National First and Regions Best‚ what are the EARs for these two banks? Hint for National Bank: Go to the St. Louis Federal Reserve Board’s website (http://research.stlouisfed.org/fred2/). Select “Interest Rates” and then “Prime Bank Loan Rate”. Use the latest MPRIME. Show your calculations. Answer: National First Bank (Prime Rate 7‚75% ) EAR =
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position in key consumer segments and returned value to stockholders through two means – stock buybacks and strong dividends. Highlights of the company’s 2008 financial performance include consolidated revenues that were up more than 4% over the previous year‚ reported EPS growth at 11.3% to $2.16 per share‚ return of $15.6 to shareholders through share buybacks and strong dividends. About 43.8% of the total capital of the company comes from debt and the remaining comes from equity. The cost of the
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interests B. Stockholders’ objectives vs Bondholders’ objectives In theory: no conflict of interest In practice: Bondholders concerned more about safety and getting paid‚ stockholders most concerned about upside potentials Eg of conflict: increasing dividends‚ riskier projects C.Firm and financial markets In theory: Financial markets are efficient (ie managers convey info honestly and in timely manners; financial markets make reasoned judgements‚ not myopic) In practice: Holes in efficient markets assumption
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