A company announces an unexpected increase in sales revenue during the most recent quarter. Our dividend...
A company announces an unexpected increase in sales revenue during the most recent quarter. Our dividend pricing model would infer that the company can now pay greater dividends which will result in a higher stock price today.
True or False?
Homework Answers
If the earnings are high the company can pay greater dividends or use the earnings somewhere else.
If the company uses its earnings to increase the dividends, The share price will increase both technically and non-technically
If we see the DDM model the cash flows in the DDM model are dividends, so more the dividends the more the stock price
And also Dividend signalling is positive for a company because it shows investors that the company is in good terms and it is taken as a positive indication by the market
So the statement is true
Add Answer to:
A company announces an unexpected increase in sales revenue
during the most recent quarter. Our dividend...
TRUE OR FALSE 1) One way for a company to expand operations into a new industry...
TRUE OR FALSE 1) One way for a company to expand operations into a new industry is to acquire the majority of common stock in another company that already operates in that industry 2) When market interest rates increase, the market value for a bond increases 3) A reason companies invest in other countries is to build strategic alliances 4) All companies are required to pay dividends to their investor 5) Stocks typically have greater upside potential, providing a higher...
can I please have answer with solutions? thank you! 29.) True or False...are claims of creditors...
can I please have answer with solutions? thank you!
29.) True or False...are claims of creditors paid before owners of common stock? 30.) You are considering the purchase of AMEX stock. Assume dividends are $1.50, dividend grow expected rate of return is 7%. What is the max price you would pay for the stock 31. A Stock is expected to pay the following dividends over the next three vears. $1.50: $1.95 and $2.20. If you sell the stock for $54.26...
Question 3: the newspaper reported last week that Little Sheep earned $28 million this year. Sales...
Question 3: the newspaper reported last week that Little Sheep earned $28 million this year. Sales revenue is $350 million. The company current has an asset turnover ratio of 0.5, and a total equity of $186.667 million. Little Sheep declares that it will pay out 30% of their earnings as dividends. The company has 2 million common shares outstanding. The required rate of return is 12% What is the profit margin of the company? What is the equity multiplier (i.e....
6 UMD Corp has bonds on the market with 15 ye is 5.5%, a par value...
6 UMD Corp has bonds on the market with 15 ye is 5.5%, a par value of $1,000 and a current prie payment. What is the coupon rate of the bonds? arket with 15 years to maturity, the current yield to maturity nd a current price of $960. The bonds makes semi-annual 2.25% Uow 2.55% 4.75% 5.10% 5.55% The dividend growth model: I assumes that dividends increase at a constant rate forever II. can be used to compute a stock...
6. Constant growth stocks Aa Aa E Consider the case of Urban Drapers Inc.: Urban Drapers...
6. Constant growth stocks Aa Aa E Consider the case of Urban Drapers Inc.: Urban Drapers Inc., a drapery company, has been successfully doing business for the past 15 years. It went public eight years ago and has been paying out a constant dividend of $4.16 per share every year to its shareholders. In its most recent annual report, the company informed investors that it expects to maintain its constant dividend into the foreseeable future and that dividends are not...
Problem 2: AFN Consider the following financial information for the Royals, Inc.: In the most recent...
Problem 2: AFN
Consider the following financial information for the
Royals, Inc.:
In the most recent year, the firm had sales of $6,000 with a
profit margin of 8%. Management chose to pay out 50% of the firm’s
income to its shareholders. Royals, Inc. was operating at full
capacity.
The company expects to increase sales by 20% next year and hopes
to improve their profit margin by 2%.
Determine the company’s AFN for next year through use of the
formula:...
1)Common stock valuelong dashVariable growth Lawrence Industries' most recent annual dividend was $1.77 per share (D0equals$...
1)Common stock valuelong dashVariable growth Lawrence Industries' most recent annual dividend was $1.77 per share (D0equals$ 1.77), and the firm's required return is 15%. Find the market value of Lawrence's shares when dividends are expected to grow at 8% annually for 3 years, followed by a 5% constant annual growth rate in years 4 to infinity. The market value of Lawrence's shares is $ nothing. (Round to the nearest cent.) 2)Integrativel- Risk and Valuation Hamlin Steel Company wishes to determine...
6. Constant growth stocks Consider the case of Urban Drapers Inc.: Urban Drapers Inc., a drapery...
6. Constant growth stocks Consider the case of Urban Drapers Inc.: Urban Drapers Inc., a drapery company, has been successfully doing business for the past 15 years. It went public eight years ago and has been paying out a constant dividend of $3.20 per share every year to its shareholders. In its most recent annual report, the company informed investors that it expects to maintain its constant dividend into the foreseeable future and that dividends are not expected to increase....
The most recent financial statements for Crosby, Inc., follow. Sales for 2018 are projected to grow...
The most recent financial statements for Crosby, Inc., follow.
Sales for 2018 are projected to grow by 20 percent. Interest
expense will remain constant; the tax rate and the dividend payout
rate will also remain constant. Costs, other expenses, current
assets, fixed assets, and accounts payable increase spontaneously
with sales What is the EFN if the firm was operating at only 80
percent of capacity in 2017? Assume that fixed assets are sold so
that the company has a 100...
The most recent financial statements for Crosby, Inc., follow. Sales for 2018 are projected to grow...
The most recent financial statements for Crosby, Inc., follow. Sales for 2018 are projected to grow by 25 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales $ 757,000 Costs 592.000 Other expenses 28,000 Earnings before interest and taxes Interest paid $ 137,000 24,000 Taxable income Taxes (24%) $ 113,000 27,120 Net income...
can I please have answer with solutions? thank you!
29.) True or False...are claims of creditors paid before owners of common stock? 30.) You are considering the purchase of AMEX stock. Assume dividends are $1.50, dividend grow expected rate of return is 7%. What is the max price you would pay for the stock 31. A Stock is expected to pay the following dividends over the next three vears. $1.50: $1.95 and $2.20. If you sell the stock for $54.26...
6 UMD Corp has bonds on the market with 15 ye is 5.5%, a par value of $1,000 and a current prie payment. What is the coupon rate of the bonds? arket with 15 years to maturity, the current yield to maturity nd a current price of $960. The bonds makes semi-annual 2.25% Uow 2.55% 4.75% 5.10% 5.55% The dividend growth model: I assumes that dividends increase at a constant rate forever II. can be used to compute a stock...
6. Constant growth stocks Aa Aa E Consider the case of Urban Drapers Inc.: Urban Drapers Inc., a drapery company, has been successfully doing business for the past 15 years. It went public eight years ago and has been paying out a constant dividend of $4.16 per share every year to its shareholders. In its most recent annual report, the company informed investors that it expects to maintain its constant dividend into the foreseeable future and that dividends are not...
Problem 2: AFN
Consider the following financial information for the
Royals, Inc.:
In the most recent year, the firm had sales of $6,000 with a
profit margin of 8%. Management chose to pay out 50% of the firm’s
income to its shareholders. Royals, Inc. was operating at full
capacity.
The company expects to increase sales by 20% next year and hopes
to improve their profit margin by 2%.
Determine the company’s AFN for next year through use of the
formula:...
6. Constant growth stocks Consider the case of Urban Drapers Inc.: Urban Drapers Inc., a drapery company, has been successfully doing business for the past 15 years. It went public eight years ago and has been paying out a constant dividend of $3.20 per share every year to its shareholders. In its most recent annual report, the company informed investors that it expects to maintain its constant dividend into the foreseeable future and that dividends are not expected to increase....
The most recent financial statements for Crosby, Inc., follow.
Sales for 2018 are projected to grow by 20 percent. Interest
expense will remain constant; the tax rate and the dividend payout
rate will also remain constant. Costs, other expenses, current
assets, fixed assets, and accounts payable increase spontaneously
with sales What is the EFN if the firm was operating at only 80
percent of capacity in 2017? Assume that fixed assets are sold so
that the company has a 100...
The most recent financial statements for Crosby, Inc., follow. Sales for 2018 are projected to grow by 25 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales $ 757,000 Costs 592.000 Other expenses 28,000 Earnings before interest and taxes Interest paid $ 137,000 24,000 Taxable income Taxes (24%) $ 113,000 27,120 Net income...
Most questions answered within 3 hours.
-
1- What are 5 general characteristics of Botticelli’s
paintings?
2- Describe 5 important traits of Flemish...
asked 33 minutes ago -
A golfer claims that his average golf score at the course he
plays regularly is less...
asked 48 minutes ago -
On May 1, First Bank perfected a security interest in Debtor’s
inventory. On June 1, Bob...
asked 1 hour ago -
A new kind of typhoid shot is being developed by a medical
research team. The old...
asked 3 hours ago -
Write a chemical equation for these reactions. (Use
the lowest possible whole number coefficients.) Include
states-of-matter...
asked 4 hours ago -
For each of the Z-scores below, determine two probabilities
(show four three decimal places): (1) the...
asked 5 hours ago -
Oxidative phosphorylation is achieved through chemiosmotic
coupling, which turns chemical energy into osmotic potential energy
that...
asked 8 hours ago -
Hollywood Shoes would like to maintain their cash account at a
minimum level of $64,000, but...
asked 8 hours ago -
Proteins CtrA-P, DnaA, and GcrA behave similarly to what
molecule in the Eukaryotic Cell Cycle?
asked 8 hours ago -
TRUE OR FALSE
In case of a competitive tender procedure, in the request for
quotation, the...
asked 8 hours ago -
I am a little behind please provide some explanation, will
provide thumbs up.
This question considers...
asked 8 hours ago -
Let say the utility function as U(X,Y) = lnX + Y. Show that the
marginal rate...
asked 8 hours ago