Question
Q1 (a) Haulsee Inc. paid a quarterly dividend of $0.12 and has announced both a 10% stock dividend and an increase in the quarterly dividend
Q1 (a) Haulsee Inc. paid a quarterly dividend of $0.12 and has announced both a 10% stock dividend and an increase in the quarterly dividend to $0.14. What is the effective rate of the dividend increase?
|
| a. | 26.7% |
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| b. | 18.3% |
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| c. | 28.3% |
|
| d. | 15.7% |
(b) If Alliant can issue a $110 million 20-year refunding bond at 7.45% and call an older $110 million issue with 20 years to maturity that had a coupon of 8.80%, what is the present value of the interest savings? Assume a 40% tax rate.
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| a. | $17,820,000 |
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| b. | $11,620,259 |
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| c. | $ 9,117,935 |
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| d. | $29,561,100 |
(d) Hi Tec is growing fast and wishes to retain all its earnings to finance future growth. Instead of a cash dividend, HiTec declares a 10% stock dividend. If the price per share of Hi Tec stock is $30 before the ex-dividend date, what will be the price on the ex-dividend date?
|
| a. | $27.00 |
|
| b. | $33.00 |
|
| c. | $27.94 |
|
| d. | $27.27 |
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