ABC has profits of P100,000, P200,000, P250,000 and P200,000 during the last four quarters. It paid dividends of P0.30, P0.60, P0.75 and P2.20. Their dividend policy would most likely be * A. Constant percentage of net earnings B. Constant dividend per share C. Constant dividend per share plus extra

ABC has profits of P100,000, P200,000, P250,000 and P200,000 during the last four quarters. It paid dividends of P0.30, P0.60, P0.75 and P2.20. Their dividend policy would most likely be * A. Constant percentage of net earnings B. Constant dividend per share C. Constant dividend per share plus extra

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 79E: Ratio Analysis MJO Inc. has the following stockholders equity section of the balance sheet: On the...

See similar textbooks

Related questions

Q: Waterway Mining Inc.'s shares are currently selling for $187. The current dividend is $5.50 and the…

A: Current price of stock is the price which can be paid for purchase of the stock. It is also called…

Q: CleanClothes Corp. growing quickly. Dividends are expected to grow at a 19 percent rate for the next…

A: The dividend growth model is a method of evaluating a company's stock that does not take into…

Q: Markus Company’s common stock sold for $2.75 per share at the end of this year. The company paid a…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Stock price=?

A: The constant growth model is a method for valuing the share price of a stock. It calculates the…

Q: If a firm has retained earnings of $3.7 million, a common shares account of $5.7 million, and…

A: The stock dividend can be defined as a payment of dividends by issuing additional shares of common…

Q: A company hired you as a consultant to help estimate its cost of capital. You have obtained the…

A: The cost of equity can be calculated from the dividend discount model

Q: IS The Dragon Co. just issued a dividend of $3.52 per share on its common stock. The company is…

A: D1=expected dividend=D0*(1+g) =3.52*1.048…

Q: Krell Industries has a share price of $22.12 today. If Krell is expected to pay a dividend of $0.94…

A: Share price today (P0) = $22.12Next year dividend (D1) = $0.94Next year share price (P1) =…

Q: Gnomes R Us Just paid a dividend of $1.80 per share. The company has a dividend payout ratio of 65…

A: Dividend per share= $1.80Dividend payout ratio = 65%P/E ratio = 15.9 times

Q: Suppose a firm has a retention ratio of 31 percent and net income of $4.6 million. How much does it…

A: Dividend Payout Ratio :— It is difference between 100% and percentage of retention ratio. Dividend…

Q: Alpha Ltd wishes to know its overall cost of capital and the management has come to you for…

A: i) Dividend (D) = Sh 5 Share price (P) = Sh 87

Q: 10. Consider the following price and dividend data for Quicksilver Inc.: Year Price (£)…

A: Concept. At annual rate of return , Sum of Present value of dividend and present value of share…

Q: A company currently reported dividend of $12. It is expected that will reinvest 50% of its earnings…

A: When a company reinvests its earning, the remaining the portion of the earning which stands…

Question

ABC has profits of P100,000, P200,000, P250,000 and P200,000 during the last four quarters. It paid dividends of P0.30, P0.60, P0.75 and P2.20. Their dividend policy would most likely be *

A. Constant percentage of net earnings
B. Constant dividend per share
C. Constant dividend per share plus extra
D. Constant percentage of net earnings plus extra

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

As the assistant to the CFO of Johnstone Inc., you must estimate its cost of common equity. You have been provided with the following data: D0 = $0.80; P0 = $22.50; and gL = 8.00% (constant). Based on the dividend growth model, what is the cost of common from reinvested earnings? 10.69% 11.25% 11.84% 12.43% 13.05%
You obtained the following data for Game Corporation: D1= $1.25; P0= $27.50; g = 5.00% (constant); and flotation costs = 6.00%. What is the cost of common equity raised by selling new common stock? What is the cost of common from reinvested earnings? Show work in excel
Ratio Analysis MJO Inc. has the following stockholders equity section of the balance sheet: On the balance sheet date, MJOs stock was selling for S25 per share. Required: Assuming MJOs dividend yield is 1%, what are the dividends per common share? Assuming MJOs dividend yield is 1% and its dividend payout is 20%, what is MJOs net income?
A company has recently declared a dividend of 12p per share. The share price is £3.72cum div and earnings for the most recent year were 60p per share.What is the Price earnings (P/E) ratio?
th As a consultant to Basso Inc., you have been provided with the following data: D₁ =$0.67: Po-$27.50; and g 9.00% (constant). What is the cost of common from retained earnings based on the dividend growth approach? a) 10.44% b) 11.44% c) 9.91% d) 11.51% e) 10.96 %
7. Determine the P/E ratio of the company ZYX if you know that the number of company's outstanding shares is 18,000,000. The current market price of the company corresponds to 588.5 per share. The company's intrinsic value is 654 per share. The expected return for investors is 8.7 %. The dividend amounts to 62.4. The EBIT in the given year corresponded to the amount of 481,530,000. a. 24.4 b. 26.6 c. 22 d. 19.7 e. 25 8. Consider the spot rate of 24.36 CZC/EUR. If we assume a payment for goods of 5.000 EUR in two months and the spot rate at that time will be 24.95 CZC/EUR. For hedging purposes, it is possible to arrange a forward on the exchange rate with a fixation of 24.7 CZC/EUR. If the company were to import goods. closing a forward would mean a profit/loss in the amount of: a. 1.250 EUR gain b. 1,700 CZC loss c. 2,950 EUR gain d. 1,250 CZC gain e. 1,250 CZC loss
Heavy Rain Corporation just paid a dividend of $3.72 per share, and the firm is expected to experience constant growth of 5.18% over the foreseeable future. The common stock is currently selling for $60.89 per share. What is Heavy Rain's cost of retained earnings using the Gordon Model (DDM) approach? Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box) Your Answer: Answer units
Abc
Suppose a firm has a retention ratio of 31 percent and net income of $4.6 million. How much does it pay out in dividends? (Enter your answer in dollars not in millions.) DIVIDEND PER SHARE
Help
The following information is available in respect of a firm: Capitalization Rate : 10% Earnings per Share : Rs. 50 Assume rate of return on investments : ja. 12% b. 8% c. 10% Show the effect of dividend policy on market price of shares applying Walter's formula when dividend pay-out ratio is : a. 0% b. 20% c. 40% d. 80% e. 100%
Answer this financial accounting question