The payment of stock dividend by a firm will cause an increase in that firm's A....
The payment of stock dividend by a firm will cause an increase in that firm's A. current ratio B. financial leverage C. contributed capital
Homework Answers
The payment of stock dividend by a firm will cause an increase in that firm's - (c) Contributed Capital.
Note: Actually the payment of stock dividend change the retained earnings to contributed capital . so the contributed capital increases. But market value of share will not affected by this . market value of share will remain same .
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The payment of stock dividend by a firm will cause an increase
in that firm's A....
Stock dividend: Firm Columbia Paper has the following stockholders equity account. The firm's common stock has...
Stock dividend: Firm Columbia Paper has the following stockholders equity account. The firm's common stock has a current market price of $30 per share. P14-9 $100,000 $20,000 $280,000 $100,000 $500,000 Preferred stock Common stock (10,000 shares at $2 par) Paid-in capital in excess of par Retained earnings Total stockholders' equity a. Show the effects on Columbia of a 5% stock dividend. b. Show the effects of (1) a 10% and (2) a 20% stock dividend. c. In light of your...
Stock dividend-Firm Columbia Paper has the following stockholders equity account The firm's common stock has a...
Stock dividend-Firm Columbia Paper has the following stockholders equity account The firm's common stock has a current market price of $33 per share. Preferred stock Common stock (10.000 shares at $3 par) Paid-in capital in excess of par Retained eanings $110.000 30.000 300 000 100.000 $540.000 Total stockholders equity a. Show the effects on Columbia of a 5% stock dividend. b. In light of your answers to part a, discuss the effects of stock dividend on stockholders equity (Round to...
Explain why a firm might prefer a stock repurchase rather than an increase in the firm's...
Explain why a firm might prefer a stock repurchase rather than an increase in the firm's regular dividend.
4. In order to receive the special dividend that the firm announced on July 20, 2020,...
4. In order to receive the special dividend that the firm announced on July 20, 2020, what is the latest date on which you have to purchase the firm's stock, which is publicly traded in the US markets only? A) End of Day of the Declaration date B) End of Day of the Ex-dividend date End of Day of the Record date The day before the Ex-dividend date E) The day before the Record date 6. (Let x be the...
The residual dividend policy approach to dividend policy is based on the theory that a firm's...
The residual dividend policy approach to dividend policy is based on the theory that a firm's optimal dividend distribution policy is a function of the firm's target capital structure, the investment opportunities available to the firm, and the availability and cost of external capital. The firm makes distributions based on the residual earnings. Consider the case of Red Bison Petroleum Producers Corporation: Red Bison Petroleum Producers Corporation is expected to generate $140,000,000 in net income over the next year. Red...
The residual dividend policy approach to dividend policy is based on the theory that a firm's...
The residual dividend policy approach to dividend policy is based on the theory that a firm's optimal dividend distribution policy is a function of the firm's target capital structure, the investment opportunities available to the firm, and the availability and cost of external capital. The firm makes distributions based on the residual earnings. Consider the case of Purple Hedgehog Forestry Group: Purple Hedgehog Forestry Group is expected to generate $240,000,000 in net income over the next year. Purple Hedgehog Forestry...
1. Return on Assets measures a firm's: a. profitable use of its assets b. use...
1. Return on Assets measures a firm's: a. profitable use of its assets b. use of financial leverage c. return on shareholders investment d. profitability of sales e. cost effectiveness of its operating activities 2. The Current ratio of a firm is 1.3, If the firm uses cash to pay short-term notes-payable, would the transaction increase or decrease the current ratio and Return on Asset ratio? 3. Which of the following could cause return on equity to increase, all...
The residual dividend policy approach to dividend policy is based on the theory that a firm's...
The residual dividend policy approach to dividend policy is based on the theory that a firm's optimal dividend distribution policy is a function of the firm's target capital structure, the investment opportunities available to the firm, and the availability and cost of external capital. The firm makes distributions based on the residual earnings. Consider the case of Red Bison Petroleum Producers Inc.: Red Bison Petroleum Producers Inc. has generated earnings of $180,000,000. Its target capital structure consists of 60% equity...
A firm that has an ROE of 7% is considering cutting its dividend payout. The stockholders...
A firm that has an ROE of 7% is considering cutting its dividend payout. The stockholders of the firm desire a dividend yield of 4% and a capital gain yield of 9%. Given this information which of the following statement(s) is/are correct? I. All else equal the firm's growth rate will accelerate after the payout change II. All else equal the firm's stock price will go up after the payout change III. All else equal the firm's P/E ratio will...
21. Which of the following is not a true statement regarding stock options? a. They may...
21. Which of the following is not a true statement regarding stock options? a. They may cause dilution of earnings per share b. The exercise of stock options could result in either gains or losses c. They involve a compensation expense d. Exercise improves the short-term liquidity and debt position of the issuing firm e. They generally allow the purchase of common stock at favorable terms 22. The pricelearnings ratio: a measures the past earning ability of the firm. b....
Stock dividend: Firm Columbia Paper has the following stockholders equity account. The firm's common stock has a current market price of $30 per share. P14-9 $100,000 $20,000 $280,000 $100,000 $500,000 Preferred stock Common stock (10,000 shares at $2 par) Paid-in capital in excess of par Retained earnings Total stockholders' equity a. Show the effects on Columbia of a 5% stock dividend. b. Show the effects of (1) a 10% and (2) a 20% stock dividend. c. In light of your...
Stock dividend-Firm Columbia Paper has the following stockholders equity account The firm's common stock has a current market price of $33 per share. Preferred stock Common stock (10.000 shares at $3 par) Paid-in capital in excess of par Retained eanings $110.000 30.000 300 000 100.000 $540.000 Total stockholders equity a. Show the effects on Columbia of a 5% stock dividend. b. In light of your answers to part a, discuss the effects of stock dividend on stockholders equity (Round to...
4. In order to receive the special dividend that the firm announced on July 20, 2020, what is the latest date on which you have to purchase the firm's stock, which is publicly traded in the US markets only? A) End of Day of the Declaration date B) End of Day of the Ex-dividend date End of Day of the Record date The day before the Ex-dividend date E) The day before the Record date 6. (Let x be the...
The residual dividend policy approach to dividend policy is based on the theory that a firm's optimal dividend distribution policy is a function of the firm's target capital structure, the investment opportunities available to the firm, and the availability and cost of external capital. The firm makes distributions based on the residual earnings. Consider the case of Red Bison Petroleum Producers Corporation: Red Bison Petroleum Producers Corporation is expected to generate $140,000,000 in net income over the next year. Red...
The residual dividend policy approach to dividend policy is based on the theory that a firm's optimal dividend distribution policy is a function of the firm's target capital structure, the investment opportunities available to the firm, and the availability and cost of external capital. The firm makes distributions based on the residual earnings. Consider the case of Purple Hedgehog Forestry Group: Purple Hedgehog Forestry Group is expected to generate $240,000,000 in net income over the next year. Purple Hedgehog Forestry...
The residual dividend policy approach to dividend policy is based on the theory that a firm's optimal dividend distribution policy is a function of the firm's target capital structure, the investment opportunities available to the firm, and the availability and cost of external capital. The firm makes distributions based on the residual earnings. Consider the case of Red Bison Petroleum Producers Inc.: Red Bison Petroleum Producers Inc. has generated earnings of $180,000,000. Its target capital structure consists of 60% equity...
21. Which of the following is not a true statement regarding stock options? a. They may cause dilution of earnings per share b. The exercise of stock options could result in either gains or losses c. They involve a compensation expense d. Exercise improves the short-term liquidity and debt position of the issuing firm e. They generally allow the purchase of common stock at favorable terms 22. The pricelearnings ratio: a measures the past earning ability of the firm. b....
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