Questions from Corporate Finance

Q: Explain how and under what assumptions M&M show that dividends

Explain how and under what assumptions M&M show that dividends are irrelevant.

Q: Explain the relationship between M&M’s argument and the use of

Explain the relationship between M&M’s argument and the use of a residual dividend policy.

Q: There are two suppliers of one input for a factory. Supplier

There are two suppliers of one input for a factory. Supplier A offers a selling price of $1,000 with terms of 1/10 net 30, while Supplier B offers $1,100 with 3/10 net 60. Which supplier offers the lo...

Q: Briefly describe the notion of homemade dividends as it relates to M

Briefly describe the notion of homemade dividends as it relates to M&M’s irrelevancy argument.

Q: 1. Dividend‐payout ratio is defined as: a

1. Dividend‐payout ratio is defined as: a. the dividend yield plus the capital gains yield. b. dividends per share divided by earnings per share. c. dividends per share divided by income per share. d....

Q: A firm has a dividend yield of 3.8 percent and

A firm has a dividend yield of 3.8 percent and a payout ratio of 36 percent. If its earnings are $22 million and there are 6 million shares outstanding, what is the price per share?

Q: What is the market price per share if the next period’s dividend

What is the market price per share if the next period’s dividend = $2.50, P 1 = $30, and K = 16%?

Q: According to equity market capitalization, what is the cost of capital

According to equity market capitalization, what is the cost of capital for the stock of the following firm? Current market value of the equity is $1.8 million with 150,000 shares outstanding. The stoc...

Q: Explain why dividend policy will be relevant in the presence of transactions

Explain why dividend policy will be relevant in the presence of transactions costs, informational asymmetry and agency problems, and taxes.

Q: Describe split shares, and explain what their popularity implies about investor

Describe split shares, and explain what their popularity implies about investor preferences for dividends in the real world.