Hello! I am looking for help on an assignment regarding some equations and question & answer problems. I have attached the homework for review. I would need it complete by November 1st at 6pm. Thank you! Some of the problems require work shown on how to solve the equations.
Instructions
NAME: | ||||||||||
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1. | The question is provided for each problem. You may need to refer to your textbook for additional information in a few cases. | |||||||||
2. | You will enter the required information into the shaded cells. | |||||||||
3. | The cells are coded: | |||||||||
a. | T | |||||||||
b. | C | |||||||||
c. | F | |||||||||
4. | Name your assignment file as “lastnamefirstinitial-FINC600-Week#”, and submit by midnight ET, Day 7. |
&16Instructions
Principles of Corporate Finance, Concise, 2nd Edition
P12-6
Problem 12-6 | |||
Here are key financial data for House of Herring, Inc.: | |||
Earnings per share for 2015 | $5.50 | ||
Number of shares outstanding | 40 million | ||
Target payout ratio | 50% | ||
Planned dividend per share | $2.75 | ||
Stock price | $130 | ||
House of Herring plans to pay the entire dividend early in January 2016. All corporate and personal taxes were repealed in 2014. a. Other things equal, what will be House of Herring’s stock price after the planned dividend payout? b. Suppose the company cancels the dividend and announces that it will use the money saved to repurchase shares. What happens to the stock price on the announcement date? Assume that investors learn nothing about the company’s prospects from the announcement. How many shares will the company need to repurchase? c. Suppose the company increases dividends to $5.50 per share and then issues new shares to recoup the extra cash paid out as dividends. What happens to the ex-dividend share prices? How many shares will need to be issued? Again, assume investors learn nothing from the announcement about House of Herring’s prospects. |
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Answers: | |||
Calculation | |||
Shares repurchased | |||
Ex-dividend price | |||
Shares needed |
Instructions: Please refer to your book for assistance with your homework. Post your work in the worksheet. Highlight your final answer.
Principles of Corporate Finance, Concise, 2nd Edition
P12-12
Problem 12-12 | ||
Respond to the following comment: “It’s all very well saying that I can sell shares to cover cash needs, but that may mean selling at the bottom of the market. If the company pays a regular cash dividend, investors avoid that risk.” | ||
Answer: | ||
Instructions: Please refer to your book for assistance with your homework. Post your work in the worksheet. Highlight your final answer.
P13-11
Problem 13-11 | ||
Executive Chalk is financed solely by common stock and has outstanding 25 million shares with a market price of $10 a shar | e. | d. |
Instructions: Please refer to your book for assistance with your homework. Post your work in the worksheet. Highlight your final answer.
P13-14
Problem 13-14 |
“MM totally ignore the fact that as you borrow more, you have to pay higher rates of interest.” Explain carefully whether this is a valid objection. |
Instructions: Please refer to your book for assistance with your homework. Post your work in the worksheet. Highlight your final answer.