Dividend from Financial Statements Cash Stockholder's Dividend Stock Price Year Equity (in millions) Div/share (S) Yield 3.00% S 2.70% S 2.60% S 2015 2.92 2,491.00 429.00 1,030.00 97.33 2016 3.12 115.56 127.69 2017 3.32 1. Stock Valuation The new dividend yield if the company increased its dividend per share by 1.75 Cash Stockholder's Dividend Div/Share (S) Year Stock Price Yield Equity (in millions) +1.75 4.80% S 4.21% S 3.97% S 2,491.00 429.00 S 1,030.00 S 2015 4.67 97.33 2016 4.87 115.56 2017 5.07 127.69 2. The dividend yield if the firm doubled it's outstanding shares Stockholder's Cash Dividend Equity (in millions) Stock Price Year Div/Share (S) Yield doubled 1.50% $ 1.35% S 1.30% S S 4,982.00 858.00 S 2015 1.46 97.33 2016 1.56 115.56 2,060.00 S 127.69 2017 1.66 3. The rate of return on equity (i.e., the cost of stock) based on the new dividend yield you calculated above Cash Return on Div/Share Year Stock Price Investment ()+1.75 4.67 4.87 5.07 $ CALCULATE ROI 2015 97.33 23.72% [(Dividends + $1.75) (new price - old price)] /(old price) 14.89% [(Dividends+ $1.75)(new price - old price)] (old price) 2016 2017 115.56 $ 127.69

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
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To what extent does the company’s dividend policies support or hinder their strategies? For example, if the company is attempting to grow, are they retaining and reinvesting their earnings rather than distributing them to investors through dividends? Be sure to substantiate claims.

Dividend from Financial Statements
Cash
Stockholder's
Dividend
Stock Price
Year
Equity (in millions)
Div/share (S)
Yield
3.00% S
2.70% S
2.60% S
2015
2.92
2,491.00
429.00
1,030.00
97.33
2016
3.12
115.56
127.69
2017
3.32
1. Stock Valuation The new dividend yield if the company increased its dividend per share by 1.75
Cash
Stockholder's
Dividend
Div/Share (S)
Year
Stock Price
Yield
Equity (in millions)
+1.75
4.80% S
4.21% S
3.97% S
2,491.00
429.00 S
1,030.00 S
2015
4.67
97.33
2016
4.87
115.56
2017
5.07
127.69
Transcribed Image Text:Dividend from Financial Statements Cash Stockholder's Dividend Stock Price Year Equity (in millions) Div/share (S) Yield 3.00% S 2.70% S 2.60% S 2015 2.92 2,491.00 429.00 1,030.00 97.33 2016 3.12 115.56 127.69 2017 3.32 1. Stock Valuation The new dividend yield if the company increased its dividend per share by 1.75 Cash Stockholder's Dividend Div/Share (S) Year Stock Price Yield Equity (in millions) +1.75 4.80% S 4.21% S 3.97% S 2,491.00 429.00 S 1,030.00 S 2015 4.67 97.33 2016 4.87 115.56 2017 5.07 127.69
2. The dividend yield if the firm doubled it's outstanding shares
Stockholder's
Cash
Dividend
Equity (in millions) Stock Price
Year
Div/Share (S)
Yield
doubled
1.50% $
1.35% S
1.30% S
S
4,982.00
858.00 S
2015
1.46
97.33
2016
1.56
115.56
2,060.00 S
127.69
2017
1.66
3. The rate of return on equity (i.e., the cost of stock) based on the new dividend yield you calculated above
Cash
Return on
Div/Share
Year
Stock Price
Investment
()+1.75
4.67
4.87
5.07
$
CALCULATE ROI
2015
97.33
23.72% [(Dividends + $1.75) (new price - old price)] /(old price)
14.89% [(Dividends+ $1.75)(new price - old price)] (old price)
2016
2017
115.56
$
127.69
Transcribed Image Text:2. The dividend yield if the firm doubled it's outstanding shares Stockholder's Cash Dividend Equity (in millions) Stock Price Year Div/Share (S) Yield doubled 1.50% $ 1.35% S 1.30% S S 4,982.00 858.00 S 2015 1.46 97.33 2016 1.56 115.56 2,060.00 S 127.69 2017 1.66 3. The rate of return on equity (i.e., the cost of stock) based on the new dividend yield you calculated above Cash Return on Div/Share Year Stock Price Investment ()+1.75 4.67 4.87 5.07 $ CALCULATE ROI 2015 97.33 23.72% [(Dividends + $1.75) (new price - old price)] /(old price) 14.89% [(Dividends+ $1.75)(new price - old price)] (old price) 2016 2017 115.56 $ 127.69
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