Regarding cumulative preferred share dividend payments by corporations, which of the following is typically most accurate?Select one:O a. No dividend payment will be made until 120 days after fiscal year endO b. No common share dividends can be paid until any arrears on the cumulative preferred share dividends are caught upO c. Default will not arise even if the dividend payment has not been made after declaration dateO d. There is no such thing as dividends on cumulative preferred sharesO e. The dividends are paid only to those on record after "record date"

Cumulative preferred share dividends can be defined as those dividends paid to preference…

Answered: Regarding cumulative preferred share…

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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If iOS Corp. issues an additional $8 million of debt and uses this money to retire common stock, what will be the expected return on the stock? Assume that the change in capital structure does not affect the risk of the debt, and recall that the WACC under the initial capital structure is 13.85%. Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your answer rounded to 2 DECIMAL PLACES. TE= Number Click "Verify" to proceed to the next part of the question.
11. What shall be the proper treatment of donated shares from stockholders? Group of answer choices a. They shall be credited to share premium at cost at the date of donation. b. They shall be credited to share premium at fair value at the date of donation. c. They shall be credited to share premium at par value at the date of donation. d. They are recorded by memorandum entry at the date of donation but the reissue or resale of donated shares increases assets and donated capital from share premium.
Which of the following is a feature associated with preferred stock? Preferred stockholders are entitled to dividends Preferred stock is not perpetual in nature Preferred stockholders do not have voting rights In case of liquidation, preferred stockholders have less priority over common stockholders Dividends on any type of preferred stock do not accumulate in arrears and are not paid at a later date if firms are currently unable to pay
Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is treated like a perpetuity if the payments last forever. Preferred stocks are considered to be a hybrid of a common stock and a bond. For example, one of the major differences between preferred shares and bonds is that the issuing companies can suspend the payment of their preferred dividends without throwing the company into bankruptcy. However, similar to bonds, preferred stockholders receive a fixed payment-their dividend- before the company's residual earnings are paid out to its common stockholders and, as with common stock, preferred stockholders can benefit from an appreciation in the value of the firm's stock securities. Consider the following case of Wellington Industries: Wellington Industries pays an annual dividend rate of 9.40% on its preferred stock that currently returns 12.60% and has a par value of $100.00 per share. What is the value of…
c. If Tp = 15 percent and TG = 30 percent, how much will the share price fall? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) Share price d. Suppose the only owners of stock are corporations. Recall that Corporations get at least a 50 percent exemption from taxation on the dividend income they receive, but they do not get such an exemption on capital gains. If the corporation's income and capital gains tax rates are both 21 percent, what does this model predict the ex- dividend share price will be? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) Share price D N. Elton and M. Gruber, "Marginal Stockholder Tax Rates and the Clientele Effect," Review of Economics and Statistics 52 (February 1970).
Which statement is incorrect? a. Dilution is an increase in earnings per share when convertible instruments are converted to ordinary shares. b. Diluted EPS is required when there are potential shares outstanding. c. Dilutive potential shares shall be deemed to have been converted into shares at the start of the period or, if later, the date of the issue of the potential shares d. Options and warrants are dilutive, when they would result in the issue of shares for less than the average market price of shares during the period. e. none of the above
a) Ex-Dividend Price Company A has declared a dividend of $2.60 per share. Suppose capital gains are not taxed but dividends are taxed at 15 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. The stock closed at $36.80 per share today and the stock goes ex dividend tomorrow. What will be the ex-dividend price? b) Market value and homemade dividends An investor own 100 shares of Firm X. The company will pay 0.50 per share this year and final liquating dividend of $42 per share next year. The required return of this stock is 14%. Ignoring taxes, what is the current market value of one share of this stock? What will the investor's homemade dividend per share be next year if they do not want any dividend this year? (hint: buy shares with the dividends this year)
The following listed businesses each have differen policies concerning distributions to shareholders: North Plc pays all profits available for distribution to shareholders in the form of a cash dividend each year. South Plc has yet to pay any cash dividends to shareholders and has no plans to make dividend payments in the foreseeable future West Plc buys back shares from shareholders as an alternative to a dividend payment East Plc offers shareholders the choice of either a small but stable cash dividend or a scrip dividend each year Required: Discuss the advantages and disadvantages of each of the above policies.
A company conducts the following capital payout and raising policies. Assume that there are no taxes, no signalling effects and no transaction costs.Which one of the following statements is NOT correct? a. 1 for 8 rights issue at a subscription price of $6 when the pre-announcement stock price was $9, will increase the number of shares by 12.5% and decrease the share price by 4.44%. b. 1 for 5 bonus issue will increase the number of shares by 20% and decrease the share price by 16.67%. c. 4 for 3 stock split will increase the number of shares by 33.33% and decrease the share price by 25%. d. 25% stock buy-back will decrease the number of shares by 25%. e. After cash dividend, normally the share price will fall.
Erna Corporation is evaluating an extra dividend versus a share repurchase. In either case, $53,500 would be spent. Current earnings are $1.79 per share, and the stock currently sells for $64 per share. There are 9,000 shares outstanding. Ignore taxes and other imperfections. a. Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth per share. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What will the company's EPS and PE ratio be under the two different scenarios? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. Extra dividend Price per share Shareholder wealth a. Repurchase Price per share Shareholder wealth b. Extra dividend EPS PE ratio b. Repurchase EPS PE ratio
1. What's the difference between paid-up capital and paid-in capital, please explain detail clearly, if the company buy back their capital , this action will affect to paid-up capital and paid-in capital in same amount or not. 2. Does the unissued stock of the company always equal to autorized stock minus issued stock.
Brosnan Co. issues preferred shares where the shareholder has the right to force Brosnan to redeem the shares. Brosnan reports using IFRS. What type of complex financial instrument has Brosnan issued? Question 20 options: a) Convertible preferred shares. b) Retractable preferred shares. c) Mandatorily redeemable preferred shares. d) Perpetual debt.

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