Question
I have a few more questions I need help with please 1) Fauver Enterprises declared a 4-for-1 stock split last year, and this year its
I have a few more questions I need help with please
1) Fauver Enterprises declared a 4-for-1 stock split last year, and this year its dividend is $2.50 per share. This total dividend payout represents a 7% increase over last year's pre-split total dividend payout. What was last year's dividend per share?
2) Kendra Brown is analyzing the capital requirements for Reynolds Corporation for next year. Kendra forecasts that Reynolds will need $25 million to fund all of its positive-NPV projects, and her job is to determine how to raise the money. Reynolds's net income is $16 million, and it has paid a $3 dividend per share (DPS) for the past several years (1 million shares of common stock are outstanding); its shareholders expect the dividend to remain constant for the next several years. The company's target capital structure is 40% debt and 60% equity.
If Reynolds maintains its current $3 DPS for next year, how much retained earnings will be available for the firm's capital budget?
3) Bayani Bakery's most recent FCF was $60 million; the FCF is expected to grow at a constant rate of 5%. The firm's WACC is 15%, and it has 15 million shares of common stock outstanding. The firm has $20 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the firm has no other non-operating assets. It has $250 million in debt and $80 million in preferred stock.
What is the value of operations?
4) A firm has 8 million shares outstanding with a market price of $40 per share. The firm has $30 million in extra cash (short-term investments) that it plans to use in a stock repurchase; the firm has no other financial investments or any debt. How many shares will remain after the repurchase (in millions)?
5 ) Petersen Company has a capital budget of $2.5 million. The company wants to maintain a target capital structure which is 80% debt and 20% equity. The company forecasts that its net income this year will be $500,000. If the company follows a residual distribution model and pays all distributions as dividends, what will be its payout ratio?
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Step: 1
1 Lets denote last years dividend per share as D After the 4for1 stock split the number of shares increased by a factor of 4 so the total dividend pay...Get Instant Access to Expert-Tailored Solutions
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