Questions from Corporate Finance

Q: Why might the government actually want the capital gains tax rate to

Why might the government actually want the capital gains tax rate to be lower than the dividend tax rate?

Q: What condition would have to be necessary in order for the riskiness

What condition would have to be necessary in order for the riskiness of the firm’s cash flows to investors to be affected by the firm’s dividend payout policy?

Q: We talked about how a firm might attract a different clientele by

We talked about how a firm might attract a different clientele by switching dividend payout policies: Might a particular clientele change its preference for dividends versus capital gains through no a...

Q: Describe the process for using the P/E ratio to estimate

Describe the process for using the P/E ratio to estimate a future stock price.

Q: Suppose that federal banking regulators in the United States announced that they

Suppose that federal banking regulators in the United States announced that they are going to allow banks to take on significant equity investments in firms to which they have lent. What would you exp...

Q: If a firm follows the modified residual dividend model discussed in this

If a firm follows the modified residual dividend model discussed in this chapter, are extraordinary dividends paid out of residual net income?

Q: Suppose a firm announces a new dividend amount every year with the

Suppose a firm announces a new dividend amount every year with the first quarterly dividend declaration, but never explicitly states that the dividend will be continued for the other three quarters of...

Q: Could the record date ever be before the ex-dividend date

Could the record date ever be before the ex-dividend date? Why or why not?

Q: Suppose a firm managed to consistently lower the length of time between

Suppose a firm managed to consistently lower the length of time between the ex-dividend date and the payment date. On average, how would this affect the firm’s stock price?

Q: The company from the text, Yellow Jacket, has decided to

The company from the text, Yellow Jacket, has decided to change its production strategy. Instead of a steady production throughout the year, they will produce the coats they estimate to sell in the mo...