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statement is TRUE : if we believe that a company is following a constant dividend policy, we can then use the current dividend to predict all future dividend because they are the same
If the dividend is constant we can use the current year dividend to predict the future dividend.
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If we believe that a company is following a constant dividend policy, we can then use...
1. According to the constant dividend growth model, which of the following is true A. the...
1. According to the constant dividend growth model, which of the following is true A. the dividend yield is the same as the capital gains yield. B. the constant growth rate is the same as the dividend yield. C. the capital gains yields is the same as the constant dividend growth rate. D. The price growth rate is the same as the dividend yield. 2. Which of the following is true about stock returns? A. the dividend yield must always...
14. The residual dividend modelThe residual dividend policy approach to dividend policy isbased on...
14. The residual dividend modelThe 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 Yellow Duck Distribution Company:Yellow Duck Distribution Company has generated earnings of $240,000,000. Its target capital structure consists of 60% equity...
In applying the constant dividend model with infinite horizon to price a stock for purchase, we...
In applying the constant dividend model with infinite horizon to price a stock for purchase, we assume the company will pay dividends forever and that we will hold onto our stock forever. True False
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 Group:
Red Bison Petroleum Producers Group is expected to generate
$140,000,000 in net income over the next year. Red...
Four years ago, Company A distributed a dividend to its shareholders of € 0.3858 per share....
Four years ago, Company A distributed a dividend to its shareholders of € 0.3858 per share. Today Company A paid a dividend of 0.80 € per share. In the past, the dividend policy of the company led to an increase in dividends each year at a steady rate. It is expected that the company will continue the same dividend policy for the next three years. Subsequently, the dividend growth rate will remain constant at 8% per annum for the foreseeable...
ch14: 2. Other dividend policy issues Several factors affect a firm's ability to pay a dividend....
ch14: 2. Other dividend policy issues Several factors affect a firm's ability to pay a dividend. Three such factors are described in the table: profitability (an increase in net income), investment opportunities, and capital structure (an increase in the debt ratio). Use the table to indicate how a firm’s ability to pay a dividend is affected by the factors described.(Hint: Consider each factor in isolation, with everything else held the same.) a: Net income increases. The ability to pay dividends,...
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...
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...
. Kicssling Corp. pays a constant S9 dividend on its stock. The company will maintain this...
. Kicssling Corp. pays a constant S9 dividend on its stock. The company will maintain this dividend for the next eight years and will then cease paying dividends forever. If the required return on this stock is 11 percent, what is the current share price? 1. Metallica Bearings, Inc. is a young start-up company. No dividends will be paid on the stock over the next nine years, because the first needs to plow back its carnings to fuel growth. The...
1. According to the constant dividend growth model, which of the following is true A. the dividend yield is the same as the capital gains yield. B. the constant growth rate is the same as the dividend yield. C. the capital gains yields is the same as the constant dividend growth rate. D. The price growth rate is the same as the dividend yield. 2. Which of the following is true about stock returns? A. the dividend yield must always...
In applying the constant dividend model with infinite horizon to price a stock for purchase, we assume the company will pay dividends forever and that we will hold onto our stock forever. True False
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...
. Kicssling Corp. pays a constant S9 dividend on its stock. The company will maintain this dividend for the next eight years and will then cease paying dividends forever. If the required return on this stock is 11 percent, what is the current share price? 1. Metallica Bearings, Inc. is a young start-up company. No dividends will be paid on the stock over the next nine years, because the first needs to plow back its carnings to fuel growth. The...
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