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A: Financial leverage of a company suggests that the company has debt along with equity in its capital…
Q: he residual theory of dividends argues that dividends a. can only be distributed if there is income…
A: Solution:- Residual theory of dividends means the dividend is the residue left after meeting the…
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A: By make the most of the price of a share of the company's common stock is an increasingly suitable…
Q: Firms must provide the right incentives if they are to get -Select-shareholderscreditorsmanagersItem…
A: Filled in the Blanks Firms must provide the right incentives if they are to get managers to focus…
Q: which one is correct please confirm? QUESTION 21 Finance researcher Myron Gordon argues that ____.…
A: According to Myron Gordon a company’s stock is worth sum of all its future dividend’s present value.…
Q: In examining investors’ preferences for dividends, it is useful to begin with the concept of…
A: Dividends are the amount which are distributed by the Company out of the profits earned during the…
Q: investors
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A: The ways in which corporations return capital to their equity owners is known as payout policy.…
Q: Which of the following statements is TRUE about the Modigliani and Miller Theory regarding dividend…
A: MM theory was proposed in 1961. It suggests that dividend and capital gain on shares are equivalent…
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A: Repurchase is purchase of own shares of company to distribute wealth among shareholders.
Q: why would investors prefer to invest in a company with a regular divided policy than a company with…
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Q: Which of the following is/are true regarding payout policy to shareholders? A. Most of the time…
A:
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A: Stockholder: An individual or group holding the equity stock of the company is called the…
Q: Indicate whether the following statements are true or false. If the statementis false, explain…
A: true
Q: Identify the decision rule that best fits each of the following descriptions. Direct…
A: The decision rule for each of the following: NPV: Should be positive, that is greater than the…
Q: Which
A: Shareholders are considered as the owners of the company. It means an overall wealth of the…
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A: The use of debt is very common in organization because the debt had the tax advantages due to which…
Q: Which of the following statements is CORRECT? a. The capital structure that maximizes the stock…
A: Capital structure refers to the composition of different sources of financing in the capital of the…
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A: Capital structure refers to the financial mix of debt and equity. A well-balanced capital structure…
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A: The minimum rate of return which is expected to be generated by an investment so that its financing…
Q: The residual dividend approach is the best dividend policy to adopt if a firm’s management wants to…
A: I believe that, residual dividend policy is a good approach when the management aims at maximizing…
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A: Cash dividend are paid to shareholders that affect the retained earnings and ultimately the total…
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A: Stocks can be of preferred stock or common stock
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A: Raising funds via external equity means raising funds via equity share capital to finance the assets…
Q: When looking to invest corporate dollars, is the top-down approach is preferred over the bottom-up…
A: Answer: Corporations are exposed to factors which are related to macroeconomic. Therefore, while…
Q: Shareholders want managers to maximize the (Click to select) dividend expected return…
A: Shares refer to a unit that depicts the ownership held by the investor in the capital of the company…
Q: investors would normally prefer the firm to have a higher dividends coverage ratio True Fales
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Q: In case you retain huge amount of profit of your company for long term investment, what financial…
A: Given that the company retained a huge amount of profit for long term investment.
Q: One position expressed in the financial literature is that firms set their dividends as aresidual…
A: A residual dividend policy is one where a company uses residual equity to fund dividend payments.…
Q: Is this statement true or false? Give a reason for your answer. "The homemade dividend strategy…
A: homemade dividend strategy is a strategy wherein the dividend paying is seen as irrelevant because…
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A: Whenever a business unit opens its subsidiary and sells around 20-30% of the shares with the help of…
Q: Discuss whether maximizing of shareholder wealth is the be-all and end-all for a firm.
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Q: Share holder wealth maximization theoretically is theatrically the most sound but practically…
A: shareholders wealth maximization is the long-term objective of the company to increase the value of…
Positive NPV projects enhance shareholder wealth. However, in some cases the payment of dividends limit the number of positive NPV projects a firm can accept. Why, then, shouldn’t shareholders prefer a residual dividend policy?
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- Can a firm maximize its profit if it is only managed to meet shareholders' interests? (Own words please)What does it mean to say that managers should maximize shareholder wealth "subject to ethical constraints"? What ethical considerations might enter into decisions that result in cash flow and stock price effects that are less than they might otherwise have been?In the case of a perfect capital market, according to Modigliani and Miller Proposition I and II, what is the optimal capitalstructure? When you introduce taxes, how can leverage alter the incentives of managers?
- Which of the following is true regarding IPO pricing? Answers: Underpricing is more popular which hurts the firm Underpricing is more popular which hurts the investment bank Overpricing is more popular which hurts the firm Overpricing is more popular which hurts the investment bankIt has been shown that in the absence of taxes and other market imperfections, the firm value will be unaffected by dividend policy. Explain the logic behind this conclusion. Next, describe three real-world factors that may cause one dividend policy to be preferable to another.How might capital rationing conflict with the goal of maximizing shareholders' wealth?
- What effect would the calculation performed have in terms of shareholder value? In other words, suppose the company’s goal is to maximize shareholder value. How will doubling outstanding shares support or inhibit that goal? Be sure to justify reasoning.Discuss and explain why the following are considered as factors affecting dividend policy? Give some examples as well.1. Number of profitable investment opportunities.2. Possibility of accelerating or delaying projects.In a few sentences, answer the following question as completely as you can. Given our goals of firm value and shareholder wealth maximization, we have stressed the importance of NPV. Yet many financial decision makers at well-known firms continue to use less desirable measures (such as payback period) rather than more desirable measures (such as payback period and AAR, in addition to the NPV and IRR). Why do you think this is the case?
- What does it mean to say that managers should maximize shareholders' wealth "subject to ethical constraints"? What ethical considerations might factor into decisions that result in lower cash flow and stock price effects than they might have otherwise been valued?why would investors prefer to invest in a company with a regular divided policy than a company with a low regular and extra dividend policy?Would a firm that has many good investment opportunities be likely to have ahigher or a lower dividend payout ratio than a firm with few good investment opportunities?Explain.