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Big Industries has the following market - value balance sheet. The stock currently sells for $ 2 0 a share, and there are 1 ,
Big Industries has the following marketvalue balance sheet. The stock currently sells for $ a share, and there are shares outstanding. The firm will either pay a $ per share dividend or repurchase $ worth of stock. Ignore taxes.
Assets Liabilities and Equity
Cash $ Debt $
Fixed assets Equity
A What will be the subsequent price per share if the firm pays a dividend?
B What will be the subsequent price per share if the firm repurchases stock?
Note: Round your answer to the nearest dollar.
C f total earnings of the firm are $ a year, find earnings per share if the firm pays a dividend.
Note: Do not round intermediate calculations. Round your answer to decimal places.
D If total earnings of the firm are $ a year, now find earnings per share if the firm repurchases stock.
Note: Do not round intermediate calculations. Round your answer to decimal places.
E If total earnings of the firm are $ a year, find the priceearnings ratio if the firm pays a dividend.
Note: Do not round intermediate calculations. Round your answer to decimal places.
F If total earnings of the firm are $ a year, find the priceearnings ratio if the firm repurchases stock.
Note: Do not round intermediate calculations. Round your answer to decimal places.
G Adherents of the dividendsaregood school sometimes point to the fact that stocks with high dividend payout ratios tend to sell at aboveaverage priceearnings multiples. Is Big Industries PE ratio higher if it pays a dividend?
A Stock Price per share
B Stock Price per share
C EPS
D EPS
E Priceearnings ratio
F Priceearnings ratio
G Is big industries' Pe ratio higher if it pays a dividend?
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