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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person becomes a shareholder and owner of the corporation. Shareholder and corporations are liable. THE LIMITED LIABILITY OF SHAREHOLDER One of the key advantages of the corporate forms is the limited liability of its owners. Corporate shareholders normally are not personally liable for the obligations of the corporation beyond the extent of their investments. CORPORATE TAXATION Corporate profits are taxed‚ and do not receives tax deduction for dividends distributed to shareholders. Profits that
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To inform my audience about the life of Milton S. Hershey. Most people think Milton Hershey was just the maker of Hershey chocolate‚ but he has done much more. I. Milton Hershey opened his first candy business when he was only 18. A. He left school at the age of 14. 1. He became an apprentice to a candy maker and decided to set out on his own as a candy maker. B. He opened candy businesses in Philadelphia‚ New York‚ Denver‚ Chicago‚ and New Orleans. 1. He went bankrupt in both Philadelphia
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the most widely used concepts in finance is that shareholders require a risk premium over bond yields to bear the additional risks of equity investments. While models such as the two-parameter capital asset pricing model (CAPM) or arbitrage pricing theory offer explicit methods for varying risk premia across securities‚ the models are invariably linked to some underlying market (or factor-specific) risk premium. Unfortunately‚ the theortical models provide limited practical advice on establishing
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Keynes versus Friedman To begin with‚ I would like to say that these to economists made perhaps the greatest and the most significant contribution to economy in the twentieth century. They are beyond any doubt among most powerful intellectuals that set their feet over the ground. Ideas they created‚ patterns they discovered and laws they introduced have become fundamental in political economy and macroeconomics. Still‚ these two brilliant minds did not share each others’ views over some basic economics
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JOHN MILTON “Milton! thou shouldst be living at this hour; England hath need of thee” are the words of William Wordsworth in his poem “London‚ 1802” (Wordsworth). Wordsworth believed England was falling apart and needed John Milton. John Milton was a seventeenth-century author‚ poet‚ critic‚ Bible scholar‚ and political leader. John Milton is famous for his many creative books and poems about what he believes and defends. John Milton’s works were influenced by the knowledge he obtained‚ the hardships
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John Milton “Paradise Lost” analysis John Milton - one of the greatest poets of England‚ the largest writer and leader of the Great British revolution. Everything written by Milton in half a century‚ the undeniable skill‚ pales next to his masterpiece - the poem "Paradise Lost." As a student‚ poet‚ decided to create an epic piece that would be glorified England and its literature. The poet reflects on the reason of disobedience of the first four people who violated the ban is the only Creator
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Business and Society Relationship Friedman v.s. Drucker Compare and contrast the two approaches to business ethics. After review of the two articles‚ there are some notable differences between Milton Friedman and Peter Drucker’s approach to business ethics. Friedman’s main point is the primary responsibility of a business is to its stockholders and increasing its profits. Moreover‚ Friedman (1970) indicated that there are both ethical and legal limitations on business operation‚ underscoring
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cayla ***** December 2‚ 2013 John Milton essay John Milton (1608 - 1674) was an English Poet with controversial opinions. He became blind in 1651‚ which in no way affected his writings and in his sonnet‚ "When I consider how my light is spent"‚ and “How Soon Hath Time”‚ the poet refers to his blindness and the use of time. From the death of his infant son‚ to the death of his wife‚ down to Milton becoming blind‚ surprisingly‚ he had yet to let these obstacles stop him from being the amazing
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Rights of Shareholders. Introduction: A shareholder is an individual or company that legally owns one or more shares of stock in that company. Shareholders are the owners of companies. A small business may have just one shareholder‚ the founder‚ while a public company may have thousands of individual and institutional shareholders‚ such as mutual fund companies‚ pension funds and hedge funds. Shareholders play an important role in the financing‚ operations‚ governance and
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