Chia Chia, Inc. stock is currently trading at $90 a share. The firm feels that the desirable price range for its stock should be $25-$30. Which of the following option is the most appropriate for the firm to achieve the desired price range? O liquidating dividend. O stock dividend. O special dividend. O cash dividend.

Chia Chia, Inc. stock is currently trading at $90 a share. The firm feels that the desirable price range for its stock should be $25-$30. Which of the following option is the most appropriate for the firm to achieve the desired price range? O liquidating dividend. O stock dividend. O special dividend. O cash dividend.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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What does it mean when preferred stock has a cumulative feature? A.A dividend must be paid to the preferred stockholders each year. B. A dividend cannot be paid to the common stockholders. C. If dividends were not paid to preferred stockholders in previous years, these dividends must be paid before any dividends are paid to the common stockholders. D. The stockholders have the right to share in extra dividends. Please explain why the option is correct and remaining incorrect in detail explain each and every option in detail with explanation
What is the answers and the working
JPix management is considering a stock split. JPix currently sells for$120 per share and a 3-for-2 stock split is contemplated. What will be thecompany’s stock price following the stock split, assuming that the split hasno effect on the total market value of JPix’s equity?
Assume that you have an opportunity to buy the stock of CoolTech, Inc., an IPO being offered for $10.78 per share. Although you are very much interested in owning the company, you are concerned about whether it is fairly priced. To determine the value of the shares, you have decided to apply the free cash flow valuation model to the firm's financial data that you've accumulated from a variety of data sources. The key values you have compiled are summarized in the following table, a. Use the free cash flow valuation model to estimate CoolTech's common stock value per share. b. Judging by your finding in part a and the stock's offering price, should you buy the stock? c. On further analysis, you find that the growth rate in FCF beyond year 4will be 5% rather than 4%. What effect would this finding have on your responses in parts a and b?
Please fast answer. Your company is considering an issue of preference shares. The market is currently expecting a return of 7 percent and your company expects earnings per share to be $10.10 and the dividend for preferenceshares to be $1.40. i) What will be the issue price of a preference share? $20
Please help by telling me the correct awnser The value of an ordinary shareSelect one or more:a. Will fall if future profit forecasts are higher than expectedb. Is always at its fundamental valuec. Can rise and fall along with market sentimentd. Will rise if a firm introduces some cost saving innovation
Carby Hardware has an outstanding issue of perpetual preferred stock with an annual dividend of $7.38 per share. If the required return on this preferred stock is 7.0%, at what price should the preferred stock sell? (Round your answer to 2 decimal places.) Please work out the problem do not use excel.
You have gathered the following information for a company: The current price-to-earnings for the firm is The expected Earnings per share for the firm is The current price of the stock is Someone offers you $110 for the stock. What would you do? B Reject the offer as the expected future value is 15 $8.25 Accept the offer as there is a profit of $90.00 $123.75 Accept the offer as the expected future value is less than $110 Reject the offer as you have no idea where future prices will be. $20.00
Is it better for a firm’s actual stock price in the market to be under, over, or equal to its intrinsicvalue? Would your answer be the same from the standpoints of stockholders in generaland a CEO who is about to exercise a million dollars in options and then retire? Explain.
Assume that a firm can issue preferred stock that has a $70 par value and pays a 15.0% annual dividend each year. The firm's investment bankers believe that investors will be willing to pay $84.00 per share and that flotation costs will be equal to $9.97 per share. Given this information, determine the difference between the investor's required rate of return, and the firm's cost of preferred stock. 2.541% O 2.224% O 1.963% 1.398% 1.683%
АВС XYZ Discount rate (r) Historical growth rate of 0.015+2*0.085=0.185 0.015+1.5*0.085=0.142 (58/30)^(1/30)-1=0.022 Not available. Cannot dividends compute without dividends Sustainable growth rate Fundamental value using dividend growth model with the historical growth rate Fundamental value using the 467*(1+0.185)/(0.185-0.045) dividend growth model with =3953 the sustainable growth rate Fundamental value using residual income growth 0.15*(1-0.7)=0.045 467*(1+0.185)/(0.185-0.022) 0.2*(1-0)=0.2 Not available. Cannot =3395 compute without dividends Not available. Cannot compute without dividends 80*(1+0.022)-(550*0.022)/(0. 185-0.022)=427.36 Not available. Cannot compute without dividends model with the historical growth rate Fundamental value using the 80*(1+0.045)-(550*0.045)/(0. residual income growth 12*(1+0.2)-(100*0.2)/(0.142- 0.2)=96.5 185-0.045)=420.35 model with the sustainable growth rate
You are thinking about investing in either X corp, or Y corp. Based on the following market measures, which company could be the best option based on possible return of investment? x y Price/Earnings Ratio 10.39 12.27 Earnings per Common Share 3.5 5.4 Divident Payout .464 .320

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