Two corporations A and B have exactly the same risk, and both have a current stock price of $100. Corporation A pays no dividend and will have a price of $120 one year from now. Corporation B pays dividends and will have a price of $113 one year from now after paying the dividend. The corporations pay no taxes and investors pay no taxes on capital gains, but pay a 30% income on dividends. What is the value of the dividend that investors expect corporation B to pay one year from today?  Please answer fast i give upvote

Q: Baghiben

A: The objective of the question is to calculate the new stock price of company A after it borrows…

Q: stes Park, Inc., has declared a dividend of $5.90 per share. Suppose capital gains are not taxed,…

A: If the stock is about to go tax ex-dividend, then the price of the stock will be fall to the extent…

Q: a. What is the ex-dividend price of a share in a perfect capital market? b. If the board instead…

A: (a) Computation of the ex-divided price of share ina perfect capital market are as…

Q: that they are pretty much alike. In this problem you will need to calculate the value of each…

A: Value of equity is the market capitalization of the company and it can be obtained by calculation of…

Q: The common stock and debt of Northern Sludge are valued at $56 million and $23 million, respectively…

A: Here,Value of stock is $56 millionValue of Debt is $23 millionRequired return on stock is…

Q: mase because the re e upon the repurch y time between an

A: The M&M theorem with the presumption of perfectly efficient markets makes several assumptions,…

Q: You bought Eagles, Inc. for $3.67 per share 20 years ago.  You never sold any shares.  Today, it has…

A: Investment means engaging your funds to generate the income for the future. It increases the value…

Q: The Fourth Corp. is evaluating extra cash dividends versus share repurchases. In either case, $6,675…

A: Some time when company have extra cash than company pay dividends or may repurchase own shares from…

Q: Suppose that all capital gains are taxed at a 24% rate, and that the dividend tax rate is 48%.…

A: We have to find the impact of taxes and the dividend on share prices. In the second part, we have to…

Q: LL corporation has $500M of excess cash. The firm has no debt and 1K shares outstanding with a…

A:

Q: orporation’s board announces to pay $2 million excess cash to shareholders. At the announcement, the…

A: Dividend are share of income with shareholders by company and management and each company have own…

Q: Two companies, A and B, have the same expected earnings in the current year. Each company is equally…

A: Dividend yield is the amount of dividend to be paid out during the following year divided by the…

Q: The common stock and debt of Northern Sludge are valued at $62 million and $38 million,…

A: Here, Value of Common Stock is $62 million Value of Debt is $38 million Return on Equity is 16.8%…

Q: The current stock price of a company is $100 a share. This company announces a dividend of $5 a…

A: When a company goes public, it issues stock to investors in exchange for capital. The investor who…

Q: Rauch Inc.’s current stock price is $2 per share and it has 300 million shares outstanding. The book…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: K-C is a dividend aristocrat, a firm that has continued to pay and increase dividends for years.…

A: Bonds are shares are two forms in which investor can invest his money in the business. Both the…

Q: Stock in Company A sells for $86 a share and has a 3-year average annual return of $25 a share. The…

A: Step 1: To set up the linear programming problem, let's define the variables and constraints based…

Q: Assume we are in a Modigliani-Miller (no tax) world. Exeter Corporation has $20 million in excess…

A: Frist we need to calculate the stock price before repurchase plan Stock price before…

Q: boost its stock price. The company currently has 20 million shares outstanding with a market price…

A: A company which has leverage means it is using debt in the capital structure and the total earning…

Q: A company with 200 million shares outstanding and no debt plans to issue permanent debt with a face…

A: To find the company's tax rate, we can use the information provided about the change in share price…

Q: Que Corporation pays a regular dividend of $1 per share. Typically, the stock price drops by $0.80…

A: When the company receives profits and distributes them among the shareholders. That share of profit…

Q: The firm is currently an all-equity firm with assets worth $250 million and 100 million shares…

A: Value of All equity Firm = $250 million Number of shares = 100 million Tax rate = 20% Debt =  $100…

Q: You are an investor who currently has a debt-equity ratio of 3:1. However you are planning to switch…

A: Part 2: ExplanationStep 1: Determine the current equity portion of your investment.Your current…

Q: AlphaDog Corp Ltd. is a company with a remarkably stable dividend paying policy. It also chooses not…

A: To calculate the maximum amount you should be willing to pay, you can use the formula for the…

Q: Company AAA and Company ZZZ have differences in their capital structures, but other than that they…

A: Value of equity is the market capitalization of the company and it can be obtained by calculation of…

Q: The Gecko Company and the Gordon Company are two firms whose business risk is the same but that have…

A: Pretax required return on Gordon's stock can be calculated by using equation below.Pretax return on…

Q: We have valued stocks of publicly traded corporations as perpetuities.  Is this a reasonable method?…

A: Price of growth model stock=D1/(ke-g)

Q: Natsam Corporation has $150 million of excess cash. The firm has no debt and 600 million shares…

A: We have to find the ex dividend share price in first case, share price post repurchase ion second…

Q: Based on the $10,000 drop in market value outlined in (5) to $30,000, what is the % gain/loss on…

A: We have a leveraged position in stock. We need to assess the impact of a decline in the market value…

Q: 1. Suppose Acap Corporation will pay a dividend of $2.80 per share at the end of this year and $3…

A: Dividend for year 1(D1) = $2.80   Dividend for year 2(D2) = $3.00   Stock Price after  2 years(P2)…

Q: Digital Fruit is financed solely by common stock and has outstanding 43 million shares with a market…

A: Market value of firm:The market value of a firm refers to the total value of all the assets and…

Q: d. Suppose the only owners of stock are corporations. Recall that corporations get at least a 50…

A: When a stock goes ex-dividend, its share price reduces by the dividend amount. So, the share price…

Q: The Gecko Company and the Gordon Company are two firms whose business risk is the same but that have…

A: To determine the pretax required return on Gordon’s stock we will use capital gains growth rate,…

Q: Give me accurate answer

A: Step 1:Calculate the total corporate value,Total corporate value = No. of shares * Market price =10…

Q: NM has no debt. Its assets will be worth 600 million in one year if the economy is strong, but only…

A: Market value of assets = $400 millionBorrowing debt = $150 millionRisk-free rate = 4%Asset's worth…

Q: Miller's Hardware recently paid $1.21 per share in dividends. The company currently has excess cash…

A: Miller's Hardware is considering distributing an additional $0.35 per share to its shareholders but…

Q: a. What is the share price of Morgan Stanley stock? b. Suppose the board of directors of Morgan…

A: Price of a share is the PV of future cash flows. We can determine the price of 1 share using the…

Q: Currently, inventors in the stock market expect the price of the XYZ corporation's stock next year…

A: The efficient market hypothesis states that the asset prices reflect all the information present in…