Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

According to the M&M dividend irrelevance theory,Xyz plc currently has a 2 million shares outstanding, selling at #4 each. The firm is considering declaring a

According to the M&M dividend irrelevance theory,Xyz plc currently has a 2 million shares outstanding, selling at #4 each. The firm is considering declaring a dividend of #1.50 per share at the end of the financial year. The firm has has a net profit of #10 million to make a new investment of #15 million. The capitalization rate appropriate to it's risk class is 12%. what will be the price of the share at the end of the fiscal year if a. dividend is not declared b.dividend is declared c. how many new shares must the firm issue.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions