Principles of Managerial Finance (14th Edition) (Pearson Series in Finance)
Principles of Managerial Finance (14th Edition) (Pearson Series in Finance)
14th Edition
ISBN: 9780133507690
Author: Lawrence J. Gitman, Chad J. Zutter
Publisher: PEARSON
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Chapter 14, Problem 14.14P

a)

Summary Introduction

To determine: The number of shares after the stock split.

Introduction:

A company divides its share into multiple shares and issues to the shareholders as an additional share as per the decisions by the management is termed as stock split.

b)

Summary Introduction

To determine: The value of GM Company after the stock split.

c)

Summary Introduction

To determine: The comparison of the total value of Person N’s stock holding before and after the stock split.

d)

Summary Introduction

To discuss: Whether the Person N attains a profit or loss on the stock due to 2 for 1 split.

e)

Summary Introduction

To discuss: The tax liability of Person N.

Introduction:

Tax refers to the charge that the governments levy on the income of the individual or corporations.

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You've collected the following information from your favorite financial website. 52-Week Price Dividend Hi 77.40 Lo Stock (Dividend) Yield % PE Ratio Close Price Net Change 10.43 Acevedo .36 2.6 6 13.90 -.24 55.81 33.42 Georgette, Incorporated 1.54 3.8 10 40.43 -.01 131.04 70.05 YBM 2.55 2.9 10 89.08 3.07 50.24 35.00 13.95 Manta Energy .80 5.2 6 20.74 Winter Sports .32 1.5 28 15.43 ?? -.26 .18 According to analysts, the growth rate in dividends for YBM for the next five years is expected to be 21 percent. Suppose YBM meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 5.75 percent, indefinitely. Assume investors require a return of 14 percent on YBM stock. According to the dividend growth model, what should the stock price be today? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Chapter 14 Solutions

Principles of Managerial Finance (14th Edition) (Pearson Series in Finance)

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