Contents Introduction 2 Theories and Determinants of Dividend Policy (Section 1) 2 Tax and Clienteles Theory 2 Free cash flow and the Agency Theory 3 Growth and The Lifecycle theory 4 Firm size 5 Information Asymmetry and Signaling theory 5 Risk and the Bird in hand theory 7 Profitability 8 Conclusion 9 Analysis of Apple and Dell Dividend Policy (Section 2) 9 Apple Inc. 9 Dell Inc. 11 Conclusion 13 Reference 14 Introduction In a private firm‚ after a period of business activity the owner of the
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In the financial markets‚ the most common forms of marketable securities are stocks and bonds. Though they have some similarities to each other‚ they differ greatly in many aspects. Broadly speaking‚ both financial instruments enable one to invest in corporations‚ public and/or private‚ with possible profitable returns in the future. Stocks (or shares)‚ by definition‚ are shares of ownership in a company. By purchasing stocks in a company‚ the investor becomes a part owner‚ and thereby owns a percentage
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000 May $12‚000 February 16‚000 June 20‚000 March 18‚000 July 22‚000 April 24‚000 Schedule of cash payments (LO2) Monthly material purchases are set equal to 20 percent of forecasted sales for the next month. Of the total material costs‚ 40 percent are paid in the month of purchase and 60 percent in the following month. Labor costs will run $6‚000 per month‚ and fixed overhead is $3‚000 per month. Interest payments on the debt will be $4‚500 for both March and June. Finally‚ Elliot’s salesforce
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Unit 6 Statement of Cash Flows and Financial Statement Analysis & The Metrics of a Company Unit Assignment Kaplan University January 18‚ 2013 AC505: Advanced Managerial/Cost Accounting |Transaction |Operating |Investing |Financing | |A. Paid bills to insurers and utility providers
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Dividend Payout = $3‚000‚000 2012 Capital Budget = $12‚000‚000 1. If Middlesex increases its cash dividends in 2012 at the same rate of growth as its Net Income rate‚ what will be the total 2012 dividend payout in Dollars? 2011 Dividend Payout = $3‚000‚000 2012 Net Income = increased by 8% 2012 Dividend Payout = $3‚000‚000 + ($3‚000‚000 * 8%) = $3‚240‚000 2. What is 2012 dividend payout ratio if the company increases its dividends at 8%? 2012 Net Income = $16‚200‚000 Dividend Payout Ratio
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market policies and product market strategies as shown in the Figure 1. Figure 1: Factors affecting growth strategies of a firm The firm can alter their Financing decisions in order to manage their liabilities and equity. They can also decide the payout ratio for the shareholder which in turn has a direct impact on the growth rate of a firm. Similarly a firm can also work upon their product market strategies where in the operating management helps to manage their revenue abilities. Firm can also
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b. True 2. Investors who buy stocks may get their return from capital gains as well as dividends. But the future stock price always depends on subsequent dividends. There is no inconsistency. 3. P0 = (5 + 110)/1.08 = $106.48 4. r = 5/40 = .125. 5. P0 = 10/(.08 - .05) = $333.33. 6. By year 5‚ earnings will grow to $18.23 per share. Forecasted price per share at year 4 is 18.23/.08 = $227.91. 7. 15/.08 + PVGO = 333.33; therefore PVGO = $145.83. 8. Z’s forecasted
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BWFF2013 QUIZ 1 (10 MARKS) TOPICS COVERED: 1-4 NO. OF QUESTIONS: 80 [20 QUESTIONS FOR EACH TOPIC] INSTRUCTIONS: 1. Answer ALL questions and show ALL workings (if any). Marks will be given only for the correct workings and not for the correct answers. 2. You may present your answers in hand-written or typed-form. 3. Submit your group of four (4) answer in a single hardcopy form only; and 4. Deadline for submission: 21st October 2013 (Monday)‚ in-class. Late submission will be penalized
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assistant to Leigh Jones‚ the financial vice-president. Your first task is to estimate Harry Davis’s cost of capital. Jones has provided you with the following data‚ which she believes may be relevant to your task: a) The firm’s tax rate is 40%. b) The current price of Harry Davis’s 12% coupon‚ semiannual payment‚ noncallable bonds with 15 years remaining to maturity is $1‚153.72. Harry Davis does not use short-term interest-bearing debt on a permanent basis. New bonds would be privately
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