million consisting entirely of common stock wishes to raise another $5 million for expansion through one of the three possible financing plans.The company may finance with 1.All common stock 2.All debt at 9% 3.All preferred stock with 7% dividend EBIT is $ 1‚400‚000 and tax rate is 50%. 200‚000 shares of stock are presently outstanding.Common stock can be sold at $ 50 per share.( 100‚000 additional shares) To determine the EBIT breakeven‚ EPS is calculated for a hypothetical level of
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notice the costs of recapitalization‚ which include higher bankruptcy costs and a potential of lower credit rating. UST has a high and constant dividend payout history since 1912. The recapitalization will expose more risks to shareholders since revenues will be used to pay interest before pay dividends. Thus‚ the recapitalization may hamper future dividend payments. Background Having long been the leading company in the moist smokeless tobacco industry‚ UST Inc. was famous for its product
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CASH FLOW STATEMENT ANALYSISOver three years‚ net cash from operations has exceeded net income creating more than enough cash to cover reported depreciation amounts and normal common stock cash dividends. This indicates that Microsoft can support its cash needs with its operations and points to why the company does not rely on borrowing. Account receivables increased twofold each year‚ which indicates potential future growth. Also‚ deduction trends in current assets and liabilities demonstrate sustained
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Use this Excel spreadsheet to compute ratios; show your computations for all ratios on this tab and also include your commentary. The financial statements used to calculate these ratios are available in Appendix A and Appendix B of your textbook. Kohl’s J.C. Penney Interpretation and Comparison between the two companies’ ratios (Reading the Appendix of Chapter 13 will help you prepare the commentary) Earnings per share As given in the income statement
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Oxford brookes university Corporate Finance Concepts Critical literature review and discussion of dividend policy Prepared by: Quang Vinh Pham INTRODUCTION Dividend policy‚ according to Baker et al. (2001)‚ refers to the payout strategy that corporate directors have to comply with when settling the size and type of cash allotments to their shareholders over time. Therefore‚ the decision of dividend can influence the amount of earnings distributed against the amount retained and used for reinvestment
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FIN-516 WEEK 1 – HOMEWORK ASSIGNMENT Problem Based on Chapter 14‚ Residual Dividends Middlesex Plastics Manufacturing had 2011 Net Income of $15.0 Million. Its 2012 Net Income is forecast to increase by 8%. The company’s capital structure has been 35% Debt and 65% Equity since 2010‚ and the company plans to maintain this capital structure in 2012. The company paid $3.0 Million cash dividends in 2011. The company is planning to invest in a major capital project in 2012. The capital budget
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Chapter 158 Distributions to Shareholders: Dividends and Repurchases ANSWERS TO END-OF-CHAPTER QUESTIONS 158-1 a. The optimal distribution policy is one that strikes a balance between dividend yield and capital gains so that the firm’s stock price is maximized. b. The dividend irrelevance theory holds that dividend policy has no effect on either the price of a firm’s stock or its cost of capital. The principal proponents of this view are Merton Miller and Franco Modigliani (MM). They
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with the actual stock price and other information of their competitors. This essay will outline both the strengths and weaknesses of each of the models used‚ and how they apply to Kellogg’s. I will be particularly focusing on: Beta Calculations‚ Dividends Valuation Model (DVM)‚ Price to Earnings ratio (P.E Ratio)‚ PEG Ratio and Cash flow methods. Kellogg’s is a major producer of cereal and convenience foods‚ with their brands including cookies‚ crackers‚ toaster pastries and cereal bars. Kellogg’s
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Coral Group is profitable due to the return on equity in recent years is 15.97 which is positive. Therefore‚ after analyzing different ratios of Café de Coral Group‚ we believe that it is a suitable company to offer a special dividend Before paying special dividends The following figure is the preliminary analysis showing the overall performance of the company‚ Café de Coral Group (0341)‚ during the period starting from 2011-03-31 to 2014-03-31. HKD in thousands 12months as of 2014-03-31
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Journal of Economic and Administrative Sciences Emerald Article: Determinants of Dividend Policy: The Case of Kuwait Talla M. Al-Deehani Article information: To cite this document: Talla M. Al-Deehani‚ (2003)‚"Determinants of Dividend Policy: The Case of Kuwait"‚ Journal of Economic and Administrative Sciences‚ Vol. 19 Iss: 2 pp. 59 - 76 Permanent link to this document: http://dx.doi.org/10.1108/10264116200300006 Downloaded on: 22-01-2013 To copy this document: permissions@emeraldinsight
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