When a firm earns its profits, management would usually decide to use the earnings for future investments and/or expansion of current operations. However, in order to satisfy its investors, the firm may also opt to allocate the earnings and distribute to its shareholders. What do you call this profit that is being distributed to the stockholders? * Par Value Dividend Market Value Face Value Iba ра:

When a firm earns its profits, management would usually decide to use the earnings for future investments and/or expansion of current operations. However, in order to satisfy its investors, the firm may also opt to allocate the earnings and distribute to its shareholders. What do you call this profit that is being distributed to the stockholders? * Par Value Dividend Market Value Face Value Iba ра:

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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D O Assume that Kish Inc. hired you as a consultant to help estimate its cost of capital. You have obtained the following data: Do = $0.90; Po = $47-50; and g = 7.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings? Do not round your intermediate calculations. a. 2.03% b. 8.77% O c. 9.03% O d. 8.89% O e. 2.17% Q Search B G 8 40 E hp X Dropbox promotion fo 25 alt a W ctri *** prisc X delete backspace pause home
M-M theroy with perfect market suggests that divident payment: A.It dependes on the company's capital structure and retained earnings B.Has a positive impact on the value of a firm C.Has a negative impact on the value of a firm D.Has no impact on the value of a firm
A firm has decided to switch from FIFO to LIFO. Ceteris paribus (all things being equal), what impact will the change in accounting have on the following variables? Assume an inflationary environment. Net profit will: OA increase OB decrease OC not change OD. cannot determine
Problem #4 RatiosMr. Low Life was considering buying stock in It’s All WonderfulCorporation. To do so he computed several ratios as listed below:a) Current Ratiob) Inventory Turnover Ratioc) Profit Margin Ratiod) Debt to Equity Ratioe) Free Cash Flow RatioHow would the above ratios be affected if:Equipment was purchased with cash.Additional sales were made.Administrative expenses increasedAP was increasedThe company expected to be sued over a warranty claim. Give the effect of each transaction on the ratios given. Note thatyou will have 5 answers for each ratio.
FE1 Show your work for problem solving questions. If you use one or more sources of information in preparing any answer, provide an APA-style reference, identify any quoted information, and cite a reference wherever it is used. How would each of the following events change the equilibrium financial market value of a company? (a)an increase in its cost of production; (b) an increase in its cost of financing; (c) an increase in the market’s discount rate; (d) an increase in its sales revenue; and (e) an increase in its projected future profits.
7.Question: Defined payout policy. What are the two main ways companies distribute earnings to investors? .please I want new answer no handwritten or typewritten
May I ask for a solution and explanation to the problem for a better understanding. Thank you! 16. Compute for the return on shareholders' equity using Bittergourd Company data. a. 15% b. 16% c. 17% d. 18%
Case Study #3: Chapter 6 Business Analysis - A business can be valued by capitalizing its earnings stream (see example 6.15). How might you use the same idea to value securities, especially the stock of large publicly held companies? Is there a way to calculate a value that could be compared to the stock’s market price that would tell an investor whether it’s a good buy? (If the market price is lower than the calculated value, the stock is a bargain.) What financial figures associated with shares of stock might be used in the calculation. Consider the per share figures and ratios discussed in chapter 3 including EPS, dividends, book value per share, etc. Does one measure make more sense than the others? What factors would make a stock worth more or less than your calculated value?
QUESTION 11 Which of the following statements is true? O A. The DuPont Identity is used to calculate Return on Assets. O B. A company can imporve their P/E ratio by improving their EPS. OC.A Market to Book ratio greater than 1 always means the stock is undervalued. O D. All of the statements are false.
Q . Which of the following statements is not true?a) The return on shareholders’ funds can be calculated as profit after tax /total equity x 100b) The dividend cover ratio can be calculated from the Income statement andthe statement of cash flows and the answer will be the samec) The interest cover ratio can be calculated from the income statement andthe statement of cash flows and the answer will be differentd) The operating profit margin is also called the net profit margin
q15 Which type of brokerage account permits the broker to buy and sell shares for the investor without first contacting the investor for approval? a. Discretionary Account b. All the options are wrong c. Margin Account d. Cash Management Account q16 Buying assets that yield a return greater than the minimum acceptable hurdle rate is a part of which core principles of Finance. a. Cost principle b. Investment principle c. Dividend principle d. Financing principle
ABC 2. You examine information from the following firms Firm Net Income Sales Assets Equity I A9 9 110 98 50 B 58 642 660 322 C 137 1210 1408 761 Use the DuPont Method to answer the following questions. • Which firm is the most profitable? • Which firm is the most efficient? Which firm uses the most leverage? Which firm has the safest ROE? D 358 3698 4002 1989 I

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