The payout ratio of every year on the basis of regular dividend and cited Earnings per share (EPS). Introduction: Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings. It is paid by the company to the shareholders either in the form of cash or stock. The payout ratio is that portion of company’s earnings that paid as the dividend to the shareholders of the company. A high ratio means that the company distributed more earnings to the shareholders and low ratio means that the company uses its earnings to reinvest in the company.

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Answer 1

Question

Chapter 14, Problem 14.6P

a)

Summary Introduction

To determine: The payout ratio of every year on the basis of regular dividend and cited Earnings per share (EPS).

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings. It is paid by the company to the shareholders either in the form of cash or stock.

The payout ratio is that portion of company’s earnings that paid as the dividend to the shareholders of the company. A high ratio means that the company distributed more earnings to the shareholders and low ratio means that the company uses its earnings to reinvest in the company.

b)

Summary Introduction

To determine: The difference between the regular dividend and 25% payout for each year.

c)

Summary Introduction

To discuss: The regular and extra dividend in the years when an extra dividend would be paid and the usage of extra dividend which are not paid.

d)

Summary Introduction

To discuss: The factor that is considered in making a revision to amount that is paid as a stable dividend and the amount to pay if the firm revises the regular dividend.

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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.)

Answer 2

Question

Chapter 14, Problem 14.6P

a)

Summary Introduction

To determine: The payout ratio of every year on the basis of regular dividend and cited Earnings per share (EPS).

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings. It is paid by the company to the shareholders either in the form of cash or stock.

The payout ratio is that portion of company’s earnings that paid as the dividend to the shareholders of the company. A high ratio means that the company distributed more earnings to the shareholders and low ratio means that the company uses its earnings to reinvest in the company.

b)

Summary Introduction

To determine: The difference between the regular dividend and 25% payout for each year.

c)

Summary Introduction

To discuss: The regular and extra dividend in the years when an extra dividend would be paid and the usage of extra dividend which are not paid.

d)

Summary Introduction

To discuss: The factor that is considered in making a revision to amount that is paid as a stable dividend and the amount to pay if the firm revises the regular dividend.

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Answer 3

Question

Chapter 14, Problem 14.6P

a)

Summary Introduction

To determine: The payout ratio of every year on the basis of regular dividend and cited Earnings per share (EPS).

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings. It is paid by the company to the shareholders either in the form of cash or stock.

The payout ratio is that portion of company’s earnings that paid as the dividend to the shareholders of the company. A high ratio means that the company distributed more earnings to the shareholders and low ratio means that the company uses its earnings to reinvest in the company.

b)

Summary Introduction

To determine: The difference between the regular dividend and 25% payout for each year.

c)

Summary Introduction

To discuss: The regular and extra dividend in the years when an extra dividend would be paid and the usage of extra dividend which are not paid.

d)

Summary Introduction

To discuss: The factor that is considered in making a revision to amount that is paid as a stable dividend and the amount to pay if the firm revises the regular dividend.

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Answer 4

Question

Chapter 14, Problem 14.6P

a)

Summary Introduction

To determine: The payout ratio of every year on the basis of regular dividend and cited Earnings per share (EPS).

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings. It is paid by the company to the shareholders either in the form of cash or stock.

The payout ratio is that portion of company’s earnings that paid as the dividend to the shareholders of the company. A high ratio means that the company distributed more earnings to the shareholders and low ratio means that the company uses its earnings to reinvest in the company.

b)

Summary Introduction

To determine: The difference between the regular dividend and 25% payout for each year.

c)

Summary Introduction

To discuss: The regular and extra dividend in the years when an extra dividend would be paid and the usage of extra dividend which are not paid.

d)

Summary Introduction

To discuss: The factor that is considered in making a revision to amount that is paid as a stable dividend and the amount to pay if the firm revises the regular dividend.

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Answer 5

Chapter 14, Problem 14.6P

a)

Summary Introduction

To determine: The payout ratio of every year on the basis of regular dividend and cited Earnings per share (EPS).

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings. It is paid by the company to the shareholders either in the form of cash or stock.

The payout ratio is that portion of company’s earnings that paid as the dividend to the shareholders of the company. A high ratio means that the company distributed more earnings to the shareholders and low ratio means that the company uses its earnings to reinvest in the company.

b)

Summary Introduction

To determine: The difference between the regular dividend and 25% payout for each year.

c)

Summary Introduction

To discuss: The regular and extra dividend in the years when an extra dividend would be paid and the usage of extra dividend which are not paid.

d)

Summary Introduction

To discuss: The factor that is considered in making a revision to amount that is paid as a stable dividend and the amount to pay if the firm revises the regular dividend.

Answer 6

Chapter 14, Problem 14.6P

a)

Summary Introduction

To determine: The payout ratio of every year on the basis of regular dividend and cited Earnings per share (EPS).

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings. It is paid by the company to the shareholders either in the form of cash or stock.

The payout ratio is that portion of company’s earnings that paid as the dividend to the shareholders of the company. A high ratio means that the company distributed more earnings to the shareholders and low ratio means that the company uses its earnings to reinvest in the company.

Answer 7

Chapter 14, Problem 14.6P

a)

Summary Introduction

To determine: The payout ratio of every year on the basis of regular dividend and cited Earnings per share (EPS).

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings. It is paid by the company to the shareholders either in the form of cash or stock.

The payout ratio is that portion of company’s earnings that paid as the dividend to the shareholders of the company. A high ratio means that the company distributed more earnings to the shareholders and low ratio means that the company uses its earnings to reinvest in the company.

Answer 8

b)

Summary Introduction

To determine: The difference between the regular dividend and 25% payout for each year.

Answer 9

b)

Summary Introduction

To determine: The difference between the regular dividend and 25% payout for each year.

Answer 10

c)

Summary Introduction

To discuss: The regular and extra dividend in the years when an extra dividend would be paid and the usage of extra dividend which are not paid.

Answer 11

c)

Summary Introduction

To discuss: The regular and extra dividend in the years when an extra dividend would be paid and the usage of extra dividend which are not paid.

Answer 12

d)

Summary Introduction

To discuss: The factor that is considered in making a revision to amount that is paid as a stable dividend and the amount to pay if the firm revises the regular dividend.

Answer 13

d)

Summary Introduction

To discuss: The factor that is considered in making a revision to amount that is paid as a stable dividend and the amount to pay if the firm revises the regular dividend.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 14.1 - What two ways can firms distribute cash to...Ch. 14.1 - Why do rapidly growing firms generally pay no...Ch. 14.1 - The dividend payout ratio equals dividends paid...Ch. 14.2 - Prob. 1FOP Ch. 14.2 - Prob. 14.4RQ Ch. 14.2 - Prob. 14.5RQ Ch. 14.2 - Prob. 14.6RQ Ch. 14.3 - Does following the residual theory of dividends...Ch. 14.3 - Contrast the basic arguments about dividend policy...Ch. 14.4 - Prob. 14.9RQ

To determine: The difference between the regular dividend and 25% payout for each year.

To discuss: The regular and extra dividend in the years when an extra dividend would be paid and the usage of extra dividend which are not paid.

To discuss: The factor that is considered in making a revision to amount that is paid as a stable dividend and the amount to pay if the firm revises the regular dividend.

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Chapter 14 Solutions