Homework Answers
9) False statement = D
10) Growth rate = 15% * ((3 - 1.50)/3)
= 7.5%
Correct option = D
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Which of the following statements is FALSE regarding profitable and unprofitable growth?
You expect KT industries (KTI) will have earnings per share of $ 4 this year and...
You expect KT industries (KTI) will have earnings per share of $ 4 this year and expect that they will pay out $ 1.00 of these earnings to shareholders in the form of a dividend. KTI's return on new investments is 15% and their equity cost of capital is 12%. The expected growth rate for KTI's dividends is closest to: a: 6.8 b. 11.3 c.4.5 d. 9
pugu QUESTION 18 1 p You expect KT Industries (KTI) will have earnings per share of...
pugu QUESTION 18 1 p You expect KT Industries (KTI) will have earnings per share of $3 this year and expect that they will pay out $2.00 of these earnings to shareholders in the form of a dividend. KTI's return on new investments is 15% and their equity cost of capital is 12%. The expected growth rate for KTI's dividends is closest to: O 5.0% O 7.5% O 4.5% O 3.0% QUESTION 19 17
You expect KT industries (KTI) will have earnings per share of $ 4 this year and...
You expect KT industries (KTI) will have earnings per share of $ 4 this year and expect that they will pay out $ 1.75 of these earnings to shareholders in the form of a dividend. KTI's return on new investments is 14% and their equity cost of capital is 10%. The value of a share of KTI's stock is closest to: A.$32.94 B.$98.82 C.$82.35 D.$ 49.41
6 Which of the following statements is correct? a. The tax code encourages companies to pay...
6 Which of the following statements is correct? a. The tax code encourages companies to pay dividends rather than retain earnings. . b. If a company uses the residual dividend model to determine its dividend payments, dividends payout will tend b. to increase whenever its profitable investment opportunities increase . c. The stronger management thinks the clientele effect is, the more likely the firm is to adopt a strict version of the c. residual dividend model. d Large stock repurchases...
DFB, Inc. expects earnings this year of $4.49 per share, and it plans to pay a...
DFB, Inc. expects earnings this year of $4.49 per share, and it plans to pay a $2.55 dividend to shareholders at that time (one year from now). DFB will retain $1.94 per share of its earnings to reinvest in new projects that have an expected return of 15.4% per year. Suppose DFB will maintain the same dividend payout rate, retention rate, and return on new investments in the future and will not change its number of outstanding shares. a. What...
20. Which of the following Statements is correct? a. If a company uses the residual dividend...
20. Which of the following Statements is correct? a. If a company uses the residual dividend model to determine its dividend payments, dividends payout will tend to increase whenever its profitable investment opportunities increase. b. Large stock repurchases financed by debt tend to increase earnings per share, but they also increase the firm's financial risk. c. The tax code encourages companies to pay dividends rather than retain earnings. d. The stronger management thinks the clientele effect is, the more likely...
DFB, Inc. expects earnings this year of $4.02 per share, and it plans to pay a $2.27 dividend to shareholders at that t...
DFB, Inc. expects earnings this year of $4.02 per share, and it plans to pay a $2.27 dividend to shareholders at that time (one year from now). DFB will retain $1.75 per share of its earnings to reinvest in new projects that have an expected return of 14.6% per year. Suppose DFB will maintain the same dividend payout rate, retention rate, and return on new investments in the future and will not change its number of outstanding shares. a. What...
DFB, Inc. expects earnings next year of $5.05 per share, and it plans to pay a...
DFB, Inc. expects earnings next year of $5.05 per share, and it plans to pay a $3.19 dividend to shareholders (assume that is one year from now). DFB will retain $1.86 per share of its earnings to reinvest in new projects that have an expected return of 14.2% per year. Suppose DFB will maintain the same dividend payout rate, retention rate, and return on new investments in the future and will not change its number of outstanding shares. Assume next...
DFB, Inc. expects earnings next year of $5.01 per share, and it plans to pay a...
DFB, Inc. expects earnings next year of $5.01 per share, and it plans to pay a $3.42 dividend to shareholders (assume that is one year from now). DFB will retain $1.59 per share of its earnings to reinvest in new projects that have an expected return of 15.5% per year. Suppose DFB wil maintain the same idend payout rate, retention rate, and return on new investments in the future and will not change its number of outstanding shares. Assume next...
REH Corporation's most recent dividend was $ 2.48 per share, its expected annual rate of dividend...
REH Corporation's most recent dividend was $ 2.48 per share, its expected annual rate of dividend growth is 5%,and the required return is now 15%.A variety of proposals are being considered by management to redirect the firm's activities. Determine the impact on share price for each of the following proposed actions. a. Do nothing, which will leave the key financial variables unchanged. b. Invest in a new machine that will increase the dividend growth rate to 7% and lower the...
pugu QUESTION 18 1 p You expect KT Industries (KTI) will have earnings per share of $3 this year and expect that they will pay out $2.00 of these earnings to shareholders in the form of a dividend. KTI's return on new investments is 15% and their equity cost of capital is 12%. The expected growth rate for KTI's dividends is closest to: O 5.0% O 7.5% O 4.5% O 3.0% QUESTION 19 17
DFB, Inc. expects earnings this year of $4.49 per share, and it plans to pay a $2.55 dividend to shareholders at that time (one year from now). DFB will retain $1.94 per share of its earnings to reinvest in new projects that have an expected return of 15.4% per year. Suppose DFB will maintain the same dividend payout rate, retention rate, and return on new investments in the future and will not change its number of outstanding shares. a. What...
DFB, Inc. expects earnings this year of $4.02 per share, and it plans to pay a $2.27 dividend to shareholders at that time (one year from now). DFB will retain $1.75 per share of its earnings to reinvest in new projects that have an expected return of 14.6% per year. Suppose DFB will maintain the same dividend payout rate, retention rate, and return on new investments in the future and will not change its number of outstanding shares. a. What...
DFB, Inc. expects earnings next year of $5.05 per share, and it plans to pay a $3.19 dividend to shareholders (assume that is one year from now). DFB will retain $1.86 per share of its earnings to reinvest in new projects that have an expected return of 14.2% per year. Suppose DFB will maintain the same dividend payout rate, retention rate, and return on new investments in the future and will not change its number of outstanding shares. Assume next...
DFB, Inc. expects earnings next year of $5.01 per share, and it plans to pay a $3.42 dividend to shareholders (assume that is one year from now). DFB will retain $1.59 per share of its earnings to reinvest in new projects that have an expected return of 15.5% per year. Suppose DFB wil maintain the same idend payout rate, retention rate, and return on new investments in the future and will not change its number of outstanding shares. Assume next...
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