Questions from Corporate Finance

Q: House of Haddock has 5,000 shares outstanding and the stock

House of Haddock has 5,000 shares outstanding and the stock price is $140. The company is expected to pay a dividend of $20 per share next year and thereafter the dividend is expected to grow indefini...

Q: Here are key financial data for House of Herring, Inc.:

Here are key financial data for House of Herring, Inc.: Earnings per share for 2018 …………..….. $5.50 Number of shares outstanding…….40 million Target payout ratio……………………………..50% Planned dividend per s...

Q: Respond to the following comment: “It’s all very well saying

Respond to the following comment: “It’s all very well saying that I can sell shares to cover cash needs, but that may mean selling at the bottom of the market. If the company pays a regular cash divi...

Q: Hors d’Age Cheeseworks has been paying a regular cash dividend of $

Hors d’Age Cheeseworks has been paying a regular cash dividend of $4 per share each year for over a decade. The company is paying out all its earnings as dividends and is not expected to grow. There a...

Q: How in practice do managers of public firms meet short-run

How in practice do managers of public firms meet short-run earnings targets? By creative accounting?

Q: An article on stock repurchase in the Los Angeles Times noted:

An article on stock repurchase in the Los Angeles Times noted: “An increasing number of companies are finding that the best investment they can make these days is in themselves.” Discuss this view. Ho...

Q: Comment briefly on each of the following statements: a.

Comment briefly on each of the following statements: a. “Unlike American firms, which are always being pressured by their shareholders to increase dividends, Japanese companies pay out a much smaller...

Q: Generous dividend payouts and high price–earnings multiples are correlated positively

Generous dividend payouts and high price–earnings multiples are correlated positively. Does this imply that paying out cash as dividends instead of repurchases increases share price?

Q: “Many companies use stock repurchases to increase earnings per share.

“Many companies use stock repurchases to increase earnings per share. For example, suppose that a company is in the following position: Net profit………………………………………..……$10 million Number of shares before...

Q: The middle-of-the-road party holds that dividend

The middle-of-the-road party holds that dividend policy doesn’t matter because the supply of high-, medium-, and low-payout stocks has already adjusted to satisfy investors’ demands. Investors who lik...