Do companies feel obligated to pay dividends? Do any companies make sure to pay a dividend even though they are not required to?
If a company is not having any growth opportunities wherein it would like to invest in, then it is not obligated to pay dividends. However if it doesnot have an growth opportunities then it should payout its earnings to shareholders in the form of dividends or the market will begin to suspect that the company is not having any profits and will lead to decrease in share price
Do companies feel obligated to pay dividends? Do any companies make sure to pay a dividend...
Are there any instances in which companies should not pay dividends? How do dividends impact the value of a share of stock?
While this chapter utilizes dividend payouts to value a share of stock, many companies do not pay dividends. Why would investors be willing to buy shares in non-dividend paying companies? Under what circumstances might a company appropriately choose to not pay dividends?
Please make sure that you show all your work when solving the problems. Feel free to make any assumptions whenever you feel necessary. Just make sure that you clearly state your assumptions. Analysts expect MC, Co. to maintain a dividend payout ratio of 35% and enjoy an expected growth rate of 12% per year for the next 5 years. After the fifth year, all earnings will be paid out as dividends. The required rate of return on MC, Co equity...
How are dividends paid, and how do companies decide how much to pay?
If a company called Advanced Technologies has yet to pay a dividend on its stock, the generalized dividend model predicts that the company's stock may still have value because A. all companies are legally required to pay dividends within ten years of the initial public offering of stock. B. all companies that have any physical assets have value. C. people expect Advanced Technologies to pay dividends in the future. D. the required return on investment for high technology companies is...
. Discuss in which industries most companies do not pay dividend and why? 2. Which factors do you consider in order to value the stock of a company that does not pay dividend and how would you value the stock? 3. Select two publicly traded companies from two different industries and discuss how you would value the stock of those companies. Are your selected stocks overpriced or underpriced by the market?
1.) Consolidated Software doesn't currently pay any dividends but is expected to start doing so in 4 years. That is, Consolidated will go 3 more years without paying any dividends and then is expected to pay its first dividend (of $1.41 per share) in the fourth year. Once the company starts paying dividends, it's expected to continue to do so. The company is expected to have a dividend payout ratio of 41% and to maintain a return on equity of...
Consolidated Software doesn't currently pay any dividends but is expected to start doing so in 4 years. That is, Consolidated will go 3 more years without paying any dividends and then is expected to pay its first dividend (of $2.78 per share) in the fourth year. Once the company starts paying dividends, it's expected to continue to do so. The company is expected to have a dividend payout ratio of 41% and to maintain a return on equity of 24%....
Captured Photographs doesn't currently pay any dividends but is expected to start doing so in 4 years. That is, Captured Photographs will go 3 more years without paying any dividends and then is expected to pay its first dividend (of $3.07 per share) in the fourth year. Once the company starts paying dividends, it's expected to continue to do so. The company is expected to have a dividend payout ratio of 37% and to maintain a return on equity of...
What happens if there isn't enough APIC to pay out a liquidating dividend? Do companies then dip into C/S?