The ACME Corporation is looking to give its shareholders a type of dividend without disrupting the...
The ACME Corporation is looking to give its shareholders a type of dividend without disrupting the cash flow options of the business. Please discuss the different types of dividends that a corporation could give to its shareholders.
Homework Answers
The different types of dividends that a corporation could give to its shareholders are :
- Cash Dividend - Declaration of a certain percentage of the profits earned by the company to its shareholders.
- Stock Dividend - Involves issuance of bonus shares or it's stock to its common shareholders without any consideration.
- Property Dividend - Companies may issue a non- monetary dividend to investors rather than making a cash or stock payment in order to alter their taxable and/or reported income.
- Scrip Dividend - This involves the issue of scrips(like promissory note) to investors enabling them to receive a certain amount in future.
- Liquidating Dividend - The company returning the capital originally contributed by shareholders as a dividend is called liquidating dividend
In the given case if ACME Corporation wants to declare dividend without disrupting the cash flow options of the business it can go with the Stock dividend.
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The ACME Corporation is looking to give its shareholders a type
of dividend without disrupting the...
WACC, NPV, OCF and CFFA. The following is a set of financial statements for Acme Corporation....
WACC, NPV, OCF and CFFA.
The following is a set of financial statements for Acme
Corporation.
The target capital structure for Acme is
60% debt and 40% equity. The risk-free
rate is 2%. The market risk premium is
5%. The beta of Acme against a relevant
stock index is 0.8. The pre-tax cost of
debt for Acme is 4%. Assume an effective
corporation tax of 17%.
Sales is expected to increase 15% per
year from the new machine project.
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WACC, NPV, OCF and CFFA.
The following is a set of financial statements for Acme
Corporation.
The target capital structure for Acme is
60% debt and 40% equity. The risk-free
rate is 2%. The market risk premium is
5%. The beta of Acme against a relevant
stock index is 0.8. The pre-tax cost of
debt for Acme is 4%. Assume an effective
corporation tax of 17%.
Sales is expected to increase 15% per
year from the new machine project.
Working...
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