A firm pays dividends once per year, at the end of the year. It generated $300...
A firm pays dividends once per year, at the end of the year. It generated $300
million in free cash flow this
year, of which $75 million was used to pay all its interest obligations and
$100 million was invested in new projects. The remainder was paid out as dividends, with the same
amount paid for each share owned. If the firm has 80 million shares outstanding
and a stock price of
$42.00 at the end of the year, what is the dividend yield?
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A firm pays dividends once per year, at the end of the year. It
generated $300...
#1 Van Buren, Inc., currently pays $2.24 per share in dividends on its common stock. Dividends...
#1 Van Buren, Inc., currently pays $2.24 per share in dividends on its common stock. Dividends are expected to grow at 7.00 % per year forever. If you require a 13.00 % rate of return (i.e., the discount rate) on this investment, what value would you place on a share of Van Buren common stock? Assume that the current dividend was just paid. Answer format: Currency: Round to 2 decimal places # 2 Bad Investment Incorporated has "promised" investors to...
11. Dividends, repurchases, and firm value Remember that the primary goal of a firm is to...
11. Dividends, repurchases, and firm value Remember that the primary goal of a firm is to maximize shareholder wealth by increasing the firm's intrinsic value. It is thus important to understand the impact of distributions- both in the form of dividends or stock repurchases-on the firm's value. Consider the following situation Rihana is a financial analyst in BTR Warehousing. As part of her analysis of the annual distribution policy and its impact on the firm's value, she makes the following...
The Hastings Sugar Corporation has the following pattern of net income each year, and associated capital...
The Hastings Sugar Corporation has the following pattern of net income each year, and associated capital expenditure projects. The firm can earn a higher return on the projects than the stockholders could earn if the funds were paid out in the form of dividends. Profitable Capital Expenditure $ 7 million Year Net Income $18 million 10 million million 20 million 15 million million million The Hastings Corporation has 2 million shares outstanding (The following questions are separate from each other)....
Suppose the risk-free rate is 2.45% and an analyst assumes a market risk premium of 5.30%. Firm A just paid a dividend...
Suppose the risk-free rate is 2.45% and an analyst assumes a market risk premium of 5.30%. Firm A just paid a dividend of $1.31 per share. The analyst estimates the β of Firm A to be 1.45 and estimates the dividend growth rate to be 4.89% forever. Firm A has 260.00 million shares outstanding. Firm B just paid a dividend of $1.59 per share. The analyst estimates the β of Firm B to be 0.83 and believes that dividends will...
The Hastings Sugar Corporation has the following pattern of net income each year, and associated capital...
The Hastings Sugar Corporation has the following pattern of net income each year, and associated capital expenditure projects. The firm can earn a higher return on the projects than the stockholders could earn if the funds were paid out in the form of dividends. Year Net Income Profitable Capital Expenditure 1 $ 14 million $ 8 million 2 18 million 11 million 3 9 million 6 million 4 20 million 8 million 5 23 million 9 million The Hastings Corporation...
a) Lockhart’s Bookstores is trading at $54 per share. There are 280 million shares outstanding. what...
a) Lockhart’s Bookstores is trading at $54 per share. There are 280 million shares outstanding. what is the market capitalization of the company? b) The MedTech company recently reported net profits after taxes of $15.8million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $ 1 million per year. compute the firm’s earnings per share (EPS) (II) Assuming that the stock currently trades at $60 per share, determine what the firm’s dividend yield...
The Hastings Sugar Corporation has the following pattern of net income each year, and associated capital...
The Hastings Sugar Corporation has the following pattern of net income each year, and associated capital expenditure projects. The firm can earn a higher return on the projects than the stockholders could earn if the funds were paid out in the form of dividends. Year Net Income Profitable Capital Expenditure 1 $ 12 million $ 8 million 2 19 million 11 million 3 15 million 7 million 4 18 million 8 million 5 18 million 8 million The Hastings Corporation...
Suppose the risk-free rate is 1.58% and an analyst assumes a market risk premium of 7.67%. Firm A just paid a dividend...
Suppose the risk-free rate is 1.58% and an analyst assumes a market risk premium of 7.67%. Firm A just paid a dividend of $1.10 per share. The analyst estimates the β of Firm A to be 1.37 and estimates the dividend growth rate to be 4.39% forever. Firm A has 275.00 million shares outstanding. Firm B just paid a dividend of $1.78 per share. The analyst estimates the β of Firm B to be 0.89 and believes that dividends will...
Basic Stock Valuation: Free Cash Flow Valuation Model The recognition that dividends are dependent on earnings,...
Basic Stock Valuation: Free Cash Flow Valuation Model The recognition that dividends are dependent on earnings, so a reliable dividend forecast is based on an underlying forecast of the firm's future sales, costs and capital requirements, has led to an alternative stock valuation approach, known as the free cash flow valuation model. The market value of a firm is equal to the present value of its expected future free cash flows: Market value of company FCF (1+WACC) + FCF (1+WACC)...
The Hastings Corporation has 3 million shares outstanding (The following questions are separate from each other). ...
The Hastings Corporation has 3 million shares outstanding (The
following questions are separate from each
other).
a. If the marginal principle of retained earnings
is applied, how much in total cash dividends will be paid over the
five years? (Enter your answer in millions.)
Total cash dividends in Millions:_____________________
b. If the firm simply uses a payout ratio of 30
percent of net income, how much in total cash dividends will be
paid? (Enter your answer in millions and...
#1 Van Buren, Inc., currently pays $2.24 per share in dividends on its common stock. Dividends are expected to grow at 7.00 % per year forever. If you require a 13.00 % rate of return (i.e., the discount rate) on this investment, what value would you place on a share of Van Buren common stock? Assume that the current dividend was just paid. Answer format: Currency: Round to 2 decimal places # 2 Bad Investment Incorporated has "promised" investors to...
11. Dividends, repurchases, and firm value Remember that the primary goal of a firm is to maximize shareholder wealth by increasing the firm's intrinsic value. It is thus important to understand the impact of distributions- both in the form of dividends or stock repurchases-on the firm's value. Consider the following situation Rihana is a financial analyst in BTR Warehousing. As part of her analysis of the annual distribution policy and its impact on the firm's value, she makes the following...
The Hastings Sugar Corporation has the following pattern of net income each year, and associated capital expenditure projects. The firm can earn a higher return on the projects than the stockholders could earn if the funds were paid out in the form of dividends. Profitable Capital Expenditure $ 7 million Year Net Income $18 million 10 million million 20 million 15 million million million The Hastings Corporation has 2 million shares outstanding (The following questions are separate from each other)....
Basic Stock Valuation: Free Cash Flow Valuation Model The recognition that dividends are dependent on earnings, so a reliable dividend forecast is based on an underlying forecast of the firm's future sales, costs and capital requirements, has led to an alternative stock valuation approach, known as the free cash flow valuation model. The market value of a firm is equal to the present value of its expected future free cash flows: Market value of company FCF (1+WACC) + FCF (1+WACC)...
The Hastings Corporation has 3 million shares outstanding (The
following questions are separate from each
other).
a. If the marginal principle of retained earnings
is applied, how much in total cash dividends will be paid over the
five years? (Enter your answer in millions.)
Total cash dividends in Millions:_____________________
b. If the firm simply uses a payout ratio of 30
percent of net income, how much in total cash dividends will be
paid? (Enter your answer in millions and...
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