Chapter 16 Payout Policy Multiple Choice Questions 1. Firms can pay out cash to their shareholders in the following ways: (I) Dividends (II) Share repurchases (III) Interest payments A) I only B) II only C) III only D) I and II only Answer: D Type: Easy Page: 415 2. Dividends are decided by: (I) The managers of a firm (II) The government (III) The board of directors A) I only B) II only C) III only D) I and II only Answer: C Type: Easy Page: 416 3. Which of the following dividends is never
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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 dividends Understand why share repurchases are an alternative to dividends Regular cash dividend – cash payments made directly to shareholders‚ usually each quarter Extra cash dividend – indication that the “extra” “ t ” amount may not be repeated in the t tb t d i th future Special cash
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Ch. 18: Shareholders’ Equity What is Shareholders’ Equity? Accounts that represent the ownership interests of shareholders. Shareholders’ Equity = Assets - Liabilities Amount left over after creditor claims have been satisfied (like homeowners equity) Shareholders’ Equity appears two places within the financial statements: 1.) Shareholder’s Equity section of the balance sheet Example 1: Abbreviated Balance Sheet – The Gap‚ Inc. THE GAP‚ INC. CONSOLIDATED BALANCE
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Basic Objectives To allow better allocations of Capital market Ressources(Useful to those making invest and credit decisions ( Provide info: economic resour‚ claims and changes Fundamental Concepts Relevant - Past‚ Present‚ Future Events ( Reliable - Dependable‚ Reasonably Free Of Error ( Verifiable ( Comparable to other entities ( Consistent over time Recognition And Measurement Concepts Economic entity ( Going concern ( Monetary unit ( Periodically Basic Principles Historical
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New Century Case Analysis 1. What appeared to be New Century’s strategic objectives? Describe and evaluate the business model the company had adopted to achieve these objectives. New Century Financial Corporation was founded in 1995 went public in 1996 and was also listed on NASDAQ. New Century’s primary goal was to originate and sell subprime mortgages. The main activities of the company included generating‚ retaining‚ selling‚ and servicing home mortgage loans for subprime borrowers who
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DECISION SCREEN HELP PAGES FOR The Business Strategy Game Compiled and made available with permission from the BSG-Online authors and GLO-BUS Software‚ Inc. by BSG-Booster www.bsg-booster.com Copyright © 2006 CMI Consulting‚ LLC. Any republication or redistribution‚ in whole or in part‚ without the consent of CMI Consulting‚ LLC and GLO-BUS Software‚ Inc. is prohibited. DECISION HELP PAGE CONTENTS Branded Sales Forecast ...........................................................
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BUSS384 - Corporate Finance - Problem Set #1 Due by Wednesday‚ 15 October 2014 1. [10 points] Sydney Industries‚ Inc.‚ is considering a new project that costs $30 million. The project will generate after-tax (year-end) cash flows of $8 million for five years. The firm has a debt-to-equity ratio of 0.25. The cost of equity is 12 percent and the cost of debt is 7 percent. The corporate tax rate is 40 percent. It appears that the project has the same risk of the overall firm. Should Sydney undertake
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Abstract This Report investigates the financial effects on Wrigley’s with the issuance of $3bn debt. It explores two alternate means of allocation for the funds; pay out a one-time dividend or carry out a share repurchase. Both methods are analyzed in regards to an optimal capital structure and maximizing share holder value (value of the firm). A compilation of historical data and future predictions were used for the basis of this report‚ and recommendations. Literature Review The following
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dividend was $0.17 per share amounted to 54 million total. Through out the decade‚ the company’s dividend generally increased and so did share repurchase except 1997 and 2000 which is 11.6 and 0. Their cash flow almost connected positively with their dividend except year 1999 and 2002. Because during these two years‚ company spent large amount of money repurchase their stock and left few cash. Linear bought back their stock when they believed the price of the stock was undervalued. One thing for sure
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[Type the company name] FedEx vs. UPS Brief History of FedEx & UPS In 2004‚ the U.S. and China agreed to increase their air transportation flights‚ which delivered their goods between one another. This agreement represented the most dramatic liberalization of air traffic in the history of the two nations‚ and therefore FedEx Corporation and United Parcel Service‚ Inc. (UPS)‚ the only domestic cargo carriers who were permitted to serve
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