2/10/2010 WHAT IS A DIVIDEND? FINS 1613 Week 11 Lecture Notes Dividend Policy: Theory and Evidence Definition: A payment made by a firm out of its current or accumulated retained earnings to its owners. Broad types: 1. Cash 2. Stock Chapter 14 Dividends and Dividend Policy 1 4 Key Concepts and Skills Cash Dividend Types Understand dividend types and how they are paid Understand the issues surrounding dividend policy decisions Understand the difference between cash and share
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sales. At the end of 2006‚ current liabilities were $1 million‚ consisting of $250‚000 of accounts payable‚ $500‚000 of notes payable‚ and $250‚000 of accruals. The after-tax profit margin is forecasted to be 5 percent‚ and the forecasted payout ratio is 70 percent. Use this information to answer Problems 9-1‚ 9-2‚ and 9-3. 9-1 Use the AFN formula to forecast Carter’s additional funds needed for the AFN Formula coming year. 9-2 What would be the additional
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1. a balloon payment is a large lump sum payment at maturity of a debt. 2. a company that seeks to pay a fixed dollar amount in dividends each period will likely experience a decrease in its payout ratio over time. 3. a particular asset has a beta of 1.2 and an expected return of 10%. The expected return on the market portfolio is 13% an the risk-free is 5%. Which of the following statement is correct? This asset lies below the security market line. 4. all else equal the higher the call
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new stock‚ and thus they own all of the shares. However‚ SSC has now reached the stage in which outside equity capital is necessary if the firm is to achieve its growth targets yet still maintain its target capital structure of 60 percent equity and 40 percent debt. Therefore‚ Brown and Valencia have decided to take the company public. Until now‚ Brown and Valencia have themselves reasonable salaries but routinely reinvested all after-tax earnings in the firm‚ so dividend policy has not been an issue
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dividend payout among listed firms’ in Nigeria. It also looks at the relationship between ownership structure‚ size of firms and the dividend payouts. The annual reports for the period 2006-2010 were utilized as the main source of data collection for the 50 sampled firms. The regression analysis method was employed as a statistical technique for analysing the data collected. We find that there is a significant positive association between the performance of firms and the dividend payout of the sampled
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Introduction Deutsche Brauerei was founded in 1737 and has been in the Schweitzer family for 12 generations. The company produces quality beer and has won awards over the years and is owned entirely by 16 uncles‚ aunts and cousins. In 1998‚ Deutsche Brauerei expanded into Ukraine. Despite the Russian debt crisis‚ the popularity of Deutsche’s beer increased its sales greatly and within three years of launch‚ Ukrainian consumers accounted for 28% of Deutsche’s sales. Furthermore‚ most of the unit
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Student Name: Student ID Number: THE UNIVERSITY OF NEW SOUTH WALES JUNE / JULY 2006 FINS1613 Business Finance – Final Exam (1) TIME ALLOWED - 2 hours (2) TOTAL NUMBER OF QUESTIONS - 50 (3) ANSWER ALL QUESTIONS (4) ALL QUESTIONS ARE OF EQUAL VALUE. (5) THIS PAPER MAY NOT BE RETAINED BY CANDIDATE (6) CANDIDATES MAY BRING A PENCIL AND ERASER TO THE EXAMINATION. CANDIDATES MAY NOT BRING THEIR OWN CALCULATORS (7) THE FOLLOWING MATERIALS WILL BE PROVIDED
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1-Compute all industry ratios presented for East Coast Yachts and COMPARE and comment on each ratio as compared to the Industry Median. (60pts) Industry ratios presented for East Coast Yachts Current ratio = $11‚270‚000 / $15‚030‚000 Current ratio = 0.75 times Quick ratio = ($11‚270‚000 – 4‚720‚000) / $15‚030‚000 Quick ratio = 0.44 times Total asset turnover = $128‚700‚000 / $83‚550‚000 Total asset turnover = 1.54 times Inventory turnover = $90‚700‚000 / $4‚720‚000 Inventory turnover = 19.22
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sales‚ while total fixed costs were held to $6 million. The firm’s total assets at year-end were $20 million and the debt/equity ratio was calculated at 0.60. If the firm’s EBIT is $3 million‚ the interest on all debt is 9%‚ and the tax rate is 40%‚ what is the firm’s return on equity? A. 11.16% B. 14.4% C. 18.6% D. 24.0% 4. White Knight Enterprises is experiencing a growth rate of 9% with a return on assets of 12%. If the debt ratio is 36% and the market price of the stock is $38
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the current price of the common stock? 4. (TCO G) Singal Inc. is preparing its cash budget. It expects to have sales of $30‚000 in January‚ $35‚000 in February‚ and $35‚000 in March. If 20% of sales are for cash‚ 40% are credit sales paid in the month after the sale‚ and another 40% are credit sales paid 2 months after the sale‚ what are the expected cash receipts for March? Page 2 1. (TCO H) Zervos Inc. had the following data for 2008 (in millions). The new CFO believes (a) that an improved
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