Which of the following would be most likely to lead to a decrease in a firm's dividend payout ratio? More than 1 answer...
Which of the following would be most likely to lead to a decrease in a firm's dividend payout ratio? More than 1 answer may be correct.
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It loses access to some capital markets. |
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The firm develops many new products that need financing. |
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The firm loses a large lawsuit. |
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Net Income Increases. |
Homework Answers
It loses access to some capital markets.
The firm develops many new products that need financing.
The firm loses a large lawsuit.
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Which of the following would be most likely to lead to a decrease in a firm's dividend payout ratio? More than 1 answer...
Which of the following would be most likely to lead to a decrease in a firm's...
Which of the following would be most likely to lead to a decrease in a firm's dividend payout ratio? Question options: It loses access to some capital markets. The firm develops many new products that need financing. The firm loses a large lawsuit. Net Income Increases.
Which of the following would be most likely to lead to a decrease in a firm's...
Which of the following would be most likely to lead to a decrease in a firm's dividend payout ratio? Answer Its earnings become more stable. Its access to the capital markets increases. Its R&D efforts pay off, and it now has more high-return investment opportunities. Its accounts receivable decrease due to a change in its credit policy. Its stock price has increased over the last year by a greater percentage than the increase in the broad stock market averages.
1. Which of the following statements is most likely to be correct about price multiples based...
1. Which of the following statements is most likely to be correct about price multiples based on fundamentals? A. Price multiples are sensitive to the inputs. B. A stock may be overvalued using the price multiple method but undervalued using the discounted cash flow models. C. Price multiples are most reliable when the firm has assets with ready market values. 2. A firm has a required rate of return that is higher than its ROE. Assuming all other factors remain...
Your firm adheres strictly to the residual dividend model. All else equal, which of the following...
Your firm adheres strictly to the residual dividend model. All else equal, which of the following factors would be most likely to lead to an increase in the firm's dividend per share? Earnings are unchanged, but the firm issues new shares of common stock. The firm's net income increases. The company increases the percentage of equity in its target capital structure. The number of profitable potential projects increases. O Congress lowers the tax rate on capital gains, leaving the rest...
The residual dividend policy approach to dividend policy is based on the theory that a firm's...
The residual dividend policy approach to dividend policy is based on the theory that a firm's optimal dividend distribution policy is a function of the firm's target capital structure, the investment opportunities available to the firm, and the availability and cost of external capital. The firm makes distributions based on the residual earnings. Consider the case of Red Bison Petroleum Producers Inc.: Red Bison Petroleum Producers Inc. has generated earnings of $180,000,000. Its target capital structure consists of 60% equity...
Reynolds Paper Products Corporation follows a strict residual dividend policy. All else equal, which of the...
Reynolds Paper Products Corporation follows a strict residual dividend policy. All else equal, which of the following factors would be most likely to lead to an increase in the firm's dividend per share? The firm’s net income increases. The company increases the percentage of equity in its target capital structure. The number of profitable potential projects increases. Congress lowers the tax rate on capital gains. The remainder of the tax code is not changed. Earnings are unchanged, but the firm...
Which of the following statements is correct? a. If a firm follows the residual dividend model,...
Which of the following statements is correct? a. If a firm follows the residual dividend model, then a sudden increase in the number of profitable projects would be likely to lead to a reduction of the firm's dividend payout ratio b. The clientele effect explains why so many firms change their dividend policies so often c. One advantage of adopting the residual dividend model is that this policy makes it easier for a corporation to attract a specific and well-identified...
9. Factors that influence dividend policy Аа Аа Distribution decisions are complicated and involve the understanding...
9. Factors that influence dividend policy Аа Аа Distribution decisions are complicated and involve the understanding of critical strategic factors that affect the policy and value of a firm. Thus, the management of any firm has to consider the constraints on dividend payments, the availability and cost of alternative sources of capital, and other external factors when they create and implement their distribution policy. Consider the following restriction: Restrictions on dividend payments not to exceed the total amount of retained...
6. Factors that affect the AFN equation Several factors affect a firm's need for external funds....
6. Factors that affect the AFN equation Several factors affect a firm's need for external funds. Evaluate the effect of each following factor and place a check next to each factor that is likely to increase a firm's need for external capital-that is, its AFN (additional funds needed). Check all that apply. The firm improves its production system and increases its profit margin. The firm switches its supplier for the majority of its raw materials. The new supplier offers less...
Consider two very different firms, M and N. Firm M is a mature firm in a...
Consider two very different firms, M and N. Firm M is a mature firm in a mature industry. Its annual net income and net cash flows are both consistently high and stable. However, M's growth prospects are quite limited, so its capital budget is small relative to its net income. Firm N is a relatively new firm in a new and growing industry. Its markets and products have not stabilized, so its annual operating income fluctuates considerably. However, N has...
Your firm adheres strictly to the residual dividend model. All else equal, which of the following factors would be most likely to lead to an increase in the firm's dividend per share? Earnings are unchanged, but the firm issues new shares of common stock. The firm's net income increases. The company increases the percentage of equity in its target capital structure. The number of profitable potential projects increases. O Congress lowers the tax rate on capital gains, leaving the rest...
The residual dividend policy approach to dividend policy is based on the theory that a firm's optimal dividend distribution policy is a function of the firm's target capital structure, the investment opportunities available to the firm, and the availability and cost of external capital. The firm makes distributions based on the residual earnings. Consider the case of Red Bison Petroleum Producers Inc.: Red Bison Petroleum Producers Inc. has generated earnings of $180,000,000. Its target capital structure consists of 60% equity...
9. Factors that influence dividend policy Аа Аа Distribution decisions are complicated and involve the understanding of critical strategic factors that affect the policy and value of a firm. Thus, the management of any firm has to consider the constraints on dividend payments, the availability and cost of alternative sources of capital, and other external factors when they create and implement their distribution policy. Consider the following restriction: Restrictions on dividend payments not to exceed the total amount of retained...
6. Factors that affect the AFN equation Several factors affect a firm's need for external funds. Evaluate the effect of each following factor and place a check next to each factor that is likely to increase a firm's need for external capital-that is, its AFN (additional funds needed). Check all that apply. The firm improves its production system and increases its profit margin. The firm switches its supplier for the majority of its raw materials. The new supplier offers less...
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