The statement that “Unlike country A firms, which are often being pressured by their shareholders to rise the dividends, country J companies pay out a much smaller proportion of earnings and so enjoy a lower cost of capital”.

Question

Want to see the full answer?

Answer 1

Question

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

Chapter 16, Problem 25PS

a)

Summary Introduction

To discuss: The statement that “Unlike country A firms, which are often being pressured by their shareholders to rise the dividends, country J companies pay out a much smaller proportion of earnings and so enjoy a lower cost of capital”.

b)

Summary Introduction

To discuss: The statement that “unlike new capital, which needs a stream of new dividends to service it, retained earnings have zero cost.”

c)

Summary Introduction

To discuss: The statement that “if a company repurchases stock instead of paying dividend, the number of shares falls and earnings per share increase. Thus stock repurchase should often be preferred to paying dividends”.

The share repurchase is the strategy by which companies will take back or buy back its own shares from the market place. If the management considered the shares are undervalued the company may buy back its shares.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Suppose that you are a U.S.-based importer of goods from the United Kingdom. You expect the value of the pound to increase against the U.S. dollar over the next 30 days. You will be making payment on a shipment of imported goods in 30 days and want to hedge your currency exposure. The U.S. risk-free rate is 5.5 percent, and the U.K. risk-free rate is 4.5 percent. These rates are expected to remain unchanged over the next month. The current spot rate is $1.90. 1.Move forward 10 days. The spot rate is $1.93. Interest rates are unchanged. Calculate the value of your forward position. Do not round intermediate calculations. Round your answer to 4 decimal places.

Don't solve. I mistakenly submitted blurr image please comment i will write values. please dont Solve with incorrect values otherwise unhelpful.

The image is blurr please comment i will write values. please dont Solve with incorrect values otherwise unhelpful.

Answer 2

Question

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

Chapter 16, Problem 25PS

a)

Summary Introduction

To discuss: The statement that “Unlike country A firms, which are often being pressured by their shareholders to rise the dividends, country J companies pay out a much smaller proportion of earnings and so enjoy a lower cost of capital”.

b)

Summary Introduction

To discuss: The statement that “unlike new capital, which needs a stream of new dividends to service it, retained earnings have zero cost.”

c)

Summary Introduction

To discuss: The statement that “if a company repurchases stock instead of paying dividend, the number of shares falls and earnings per share increase. Thus stock repurchase should often be preferred to paying dividends”.

The share repurchase is the strategy by which companies will take back or buy back its own shares from the market place. If the management considered the shares are undervalued the company may buy back its shares.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

Chapter 16, Problem 25PS

a)

Summary Introduction

To discuss: The statement that “Unlike country A firms, which are often being pressured by their shareholders to rise the dividends, country J companies pay out a much smaller proportion of earnings and so enjoy a lower cost of capital”.

b)

Summary Introduction

To discuss: The statement that “unlike new capital, which needs a stream of new dividends to service it, retained earnings have zero cost.”

c)

Summary Introduction

To discuss: The statement that “if a company repurchases stock instead of paying dividend, the number of shares falls and earnings per share increase. Thus stock repurchase should often be preferred to paying dividends”.

The share repurchase is the strategy by which companies will take back or buy back its own shares from the market place. If the management considered the shares are undervalued the company may buy back its shares.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

Chapter 16, Problem 25PS

a)

Summary Introduction

To discuss: The statement that “Unlike country A firms, which are often being pressured by their shareholders to rise the dividends, country J companies pay out a much smaller proportion of earnings and so enjoy a lower cost of capital”.

b)

Summary Introduction

To discuss: The statement that “unlike new capital, which needs a stream of new dividends to service it, retained earnings have zero cost.”

c)

Summary Introduction

To discuss: The statement that “if a company repurchases stock instead of paying dividend, the number of shares falls and earnings per share increase. Thus stock repurchase should often be preferred to paying dividends”.

The share repurchase is the strategy by which companies will take back or buy back its own shares from the market place. If the management considered the shares are undervalued the company may buy back its shares.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 16, Problem 25PS

a)

Summary Introduction

To discuss: The statement that “Unlike country A firms, which are often being pressured by their shareholders to rise the dividends, country J companies pay out a much smaller proportion of earnings and so enjoy a lower cost of capital”.

b)

Summary Introduction

To discuss: The statement that “unlike new capital, which needs a stream of new dividends to service it, retained earnings have zero cost.”

c)

Summary Introduction

To discuss: The statement that “if a company repurchases stock instead of paying dividend, the number of shares falls and earnings per share increase. Thus stock repurchase should often be preferred to paying dividends”.

The share repurchase is the strategy by which companies will take back or buy back its own shares from the market place. If the management considered the shares are undervalued the company may buy back its shares.

Answer 6

Chapter 16, Problem 25PS

a)

Summary Introduction

To discuss: The statement that “Unlike country A firms, which are often being pressured by their shareholders to rise the dividends, country J companies pay out a much smaller proportion of earnings and so enjoy a lower cost of capital”.

Answer 7

Chapter 16, Problem 25PS

a)

Summary Introduction

To discuss: The statement that “Unlike country A firms, which are often being pressured by their shareholders to rise the dividends, country J companies pay out a much smaller proportion of earnings and so enjoy a lower cost of capital”.

Answer 8

b)

Summary Introduction

To discuss: The statement that “unlike new capital, which needs a stream of new dividends to service it, retained earnings have zero cost.”

Answer 9

b)

Summary Introduction

To discuss: The statement that “unlike new capital, which needs a stream of new dividends to service it, retained earnings have zero cost.”

Answer 10

c)

Summary Introduction

To discuss: The statement that “if a company repurchases stock instead of paying dividend, the number of shares falls and earnings per share increase. Thus stock repurchase should often be preferred to paying dividends”.

The share repurchase is the strategy by which companies will take back or buy back its own shares from the market place. If the management considered the shares are undervalued the company may buy back its shares.

Answer 11

c)

Summary Introduction

To discuss: The statement that “if a company repurchases stock instead of paying dividend, the number of shares falls and earnings per share increase. Thus stock repurchase should often be preferred to paying dividends”.

The share repurchase is the strategy by which companies will take back or buy back its own shares from the market place. If the management considered the shares are undervalued the company may buy back its shares.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 15

Ch. 16 - Prob. 1PS Ch. 16 - Company dividend policy Here are several facts...Ch. 16 - Dividend payments Seashore Salt Co. has surplus...Ch. 16 - Repurchases Look again at Problem 3. Assume...Ch. 16 - Payout policy in perfect capital markets Go back...Ch. 16 - Dividends and stock price Go back to the first...Ch. 16 - Prob. 7PS Ch. 16 - Repurchases and the DCF model Surf Turf Hotels is...Ch. 16 - Prob. 9PS Ch. 16 - Payout and taxes Which of the following U.S....

The statement that “Unlike country A firms, which are often being pressured by their shareholders to rise the dividends, country J companies pay out a much smaller proportion of earnings and so enjoy a lower cost of capital”.

Solution Summary: The author analyzes the statement that country J companies pay out a much smaller proportion of earnings and enjoy lower cost of capital.

Concept explainers

To discuss: The statement that “Unlike country A firms, which are often being pressured by their shareholders to rise the dividends, country J companies pay out a much smaller proportion of earnings and so enjoy a lower cost of capital”.

To discuss: The statement that “unlike new capital, which needs a stream of new dividends to service it, retained earnings have zero cost.”

Want to see the full answer?

Chapter 16 Solutions