FOUND.OF FINANCIAL MANAGEMENT-ACCESS
FOUND.OF FINANCIAL MANAGEMENT-ACCESS
17th Edition
ISBN: 9781260519969
Author: BLOCK
Publisher: MCG
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Chapter 18, Problem 7P

a.

Summary Introduction

To calculate: The cash dividend for each share during the four given stages.

Introduction:

Cash dividend per share: Dividend paid to shareholders for each share owned by the company from its earnings in the form of cash, by electronic transfers or by check is termed as cash dividend per share.

b.

Summary Introduction

To calculate: The after-tax income of an investor in Stage IV from cash dividends, assuming the number of shares owned to be 325 and the tax bracket to be 15%.

Introduction:

Cash Dividend: Dividend paid to the shareholders from the earnings of a company in cash, by electronic transfers or by check is termed as cash dividend.

c.

Summary Introduction

To explain: The two stages in which the firm would most likely use stock dividend or stock split.

Introduction:

Stock Dividend:

When a company pays dividend to its shareholders in the form of additional shares, it is termed as stock dividend. This form is generally paid out when the company has less cash reserves.

Stock split:

A corporate procedure through which the management of a company divides its current shares to increase the shares outstanding is termed as stock split. It helps in boosting the liquidity of shares.

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Wildcat, Incorporated, has estimated sales (in millions) for the next four quarters as follows: Q1 Q2 Q3 Sales $ 125 $ 145 $ 165 Q4 $ 195 Sales for the first quarter of the following year are projected at $140 million. Accounts receivable at the beginning of the year were $55 million. Wildcat has a 45-day collection period. Wildcat's purchases from suppliers in a quarter are equal to 45 percent of the next quarter's forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, and other expenses run about 20 percent of sales. Interest and dividends are $10 million per quarter. Wildcat plans a major capital outlay in the second quarter of $81 million. Finally, the company started the year with a cash balance of $70 million and wishes to maintain a $30 million minimum balance. a. Complete the following cash budget for Wildcat, Incorporated. Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in millions,…
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