Why might other investors prefer low-dividend-paying stocks?

Q: Why might a stock dividend or a stock split be of limited value to an investor? Please explain your…

A: Stock dividend is dividend paying to investors in kind. It is adding value to the shares of the…

Q: What is the major reason for a forward stock split?

A: Stock Split: Stock Split is a scheme in which a company’s total number of shares outstanding will…

Q: Why does the dilutive effect of stock options called the treasury stock method?

A: Treasury Stock Method: In this method, a company that receives exercised amount on the outstanding…

Q: What are the advantages of preferred stock versus common stock? Which type is generally preferable…

A: A company can raise its capital from different sources like equity and stocks, bonds and other type…

Q: Briefly explain why some individual investors might favour a high dividend payout.

A: Dividend payout: It means giving out some part of the profit to the shareholders as compensation for…

Q: If you use market values to calculate the WACC, and your stock price is volatile or bond prices…

A: Calculation of WACC is done by using the market value of equity and debt of a firm. In case of any…

Q: If you were a stockholder which type of stock would you prefer? Why?

A: The company issues two types of stock i.e. Common stock and Preference stock. Common shareholders…

Q: In theory, only systematic risk matters for the required return of a stock. Why does non-systematic…

A: Systematic risk refers to those which impacts the whole market rather than on particular stock…

Q: Explain the effect of D/E on asset returns, equity returns (assuming that cost of debt is not…

A: Three main actors of production namely land, labor and capital are given primary importance. Capital…

Q: Why would investors looking to have a diversified stock portfolio view a negative covariance in…

A: The correct option is:A negative covariance means the stocks would not behave the same way, which…

Q: What is the primary motivation for a forward stock split?

A: Here is the Answer

Q: Should an increase in the volatility of a firm's stock returns be associated with an increase in the…

A: A Call Option is the option(right but not obligation) to purchase an underlying security at…

Q: Why do we need to decrease the stock holdings and increase the cash orbond holdings? Explain with an…

A: One of the important decisions which is taken by the financial manager is to maintain the minimum…

Q: Companies sell common stock to raise long-term capital. What are the pros and cons of selling stock?…

A: Common Stock : Common stock is a type of security that represents ownership of equity in a company.…

Q: Which of the investors are known for taking the higher investment risk? O Common Stock holders Bond…

A: Investment risk is the risk that the amount invested is likely to decline in value or not give as…

Q: How will the presence of these and other similar stock options affect NEV’s earnings pershare?

A:

Q: In some cases, stock price decreases on the announcement of equity repurchases. How would you…

A: A stock is a financial security that is a part of a corporation's equity capital. It is issued at…

Q: If a given investor believes that a stock’s expected return exceeds its required return, then the…

A: Required rate of return is the minimum return which an investor expect on its investment. This is…

Q: Which of the following is FALSE about preferred stock? Select one: a. the value of a preferred…

A: Introduction: Preferred stock-This type of stock has characteristics  of both bonds and common stock…

Q: In general, does the market view the announcement of a new stock issue to be a good signal?

A: Answer: Usually, the business treats a fresh issue of stocks as a negative thing or negative warning…

Q: If shares were positively correlated, diversification would not reduce risk.” True or False? Please…

A: Investors often diversify their holdings to reduce the chance of losses due to the performance of a…

Q: a future investment opportunities? or should maintain its liquidity to fund its investment rather…

A: Companies have cash from the operations of the company and they have options to use the cash one is…

Q: If we dont have earnings and don't have dividends, how can we figure out what the value of the stock…

A: Determining the value of a stock without earnings or dividends relies on alternative valuation…

Q: When purchasing shares is it preferrable to purchase in anticipation of appreciation or of…

A: When it comes to investing in stocks, there is no one-size-fits-all approach that will work for…