QUESTION 1 Damson Medical's stock trades at $60 a share The Company is contemplating a 5 for 4 stock split Assuming that the stock split will have no effect on the total market value of the equity, what will be the company's stock price per share following the stock split $37 50 $48 00 $52 00 $60 00 $73 50 10 points QUESTION 2 Vicars Industries stock trades at $65 a share The Company is considering a 10 stock dividend Assuming that the stock dividend has no effect on the total market value of the equity, what will be the company's stock price per share following the stock dividend $59 09 $66 67 $73 91 $84 46 $91 35 10 points QUESTION 3 Perez Industries has net income of $1,406,000 and it has 894,000 shares of common stock outstanding The company's stock currently trades at $24 75 a share The company is considering a plan in which it will use some available cash to repurchase 5 of its shares in the open market The repurchase is expected to have no effect on either net income or the company's P E ratio What will be its stock price following the stock repurchase $26 05 $33 33 $40 69 $48 37 $68 68 10 points QUESTION 4 After a 4 for 1 stock split, Xtreme Sporting Goods paid a dividend of $1 12 per new share, which represents a 3 increase over last year's pre split dividend What was last year's dividend per share $4 35 $5 03 $6 19 $7 59 $8 07 10 points QUESTION 5 Peregrino Bay Inc has a 3 month backlog of orders for its products To meet this demand, management wants to expand production capacity by 40 by investing $1 75 million in plant and machinery The firm wants to maintain its current 35 debt to total assets ratio in its capital structure it also wants to maintain its policy of paying out 30 of last year's net income as dividends to its shareholders If last year's net income was $344,000, how much external equity must the company seek at the beginning of this year in order to expand capacity as desired Assume the firm uses only debt and common equity in its capital structure $699,000 $729,000 $842,000 $896,700 $909,000 10 points QUESTION 6 Gold's Inc is considering three independent projects, each of which requires a $375,000 investment The cost of capital for the projects vary because the projects have different levels of risk Project A has estimated internal rate of return (IRR) of 10 and a cost of capital of 12 , Project B has estimated internal rate of return (IRR) of 14 and a cost of capital of 11 , Project C has estimated internal rate of return (IRR) of 13 and a cost of capital of 10 The company's optimal capital structure calls for 28 debt and 72 common equity The company expects to have net income of $1,500,000 If the company's dividend is established using the residual model, what will be its dividend payout ratio 44 00 56 00 60 00 64 00 70 00 10 points QUESTION 7 Wilson Corp wants to determine its annual dividend The company just reported net income of $2,052,000 on sales of $16,416,000 and has 610,000 shares of stock outstanding The stock is currently trading at $57 75 per share Last year, the company had a 45 dividend payout ratio If management wants to maintain this payout ratio in the current year, what will its dividend per share be $0 91 $1 25 $1 51 $2 05 $2 60 10 points QUESTION 8 Last year Wilkes Corp reported net income of $3,736,000 on sales of $33,450,000 and had 945,000 shares of stock outstanding The company had a 20 dividend payout ratio What was the company's dividend per share last year $0 79 $0 99 $1 06 $1 29 $1 75 10 points QUESTION 9 Yarmouth Corp just reported net income of $2,450,000 on sales of $21,400,000 and has 700,000 shares of stock outstanding The stock is currently trading at $40 00 per share Last year, the company had a 40 dividend payout ratio Management has determined that if it keeps its payout ratio the same this year as last, its per share dividend for the current year will be $1 40 per share What will its dividend yield be 2 05 3 00 3 22 3 38 3 50 10 points QUESTION 10 Yarrow Corp just reported net income of $2,900,000 on sales of $29,700,000 and has 900,000 shares of stock outstanding The stock is currently trading at $50 00 per share Last year, the company had a 50 dividend payout ratio and paid a dividend per share of $1 37 Management has decided to pay the same dividend per share this year as last What will its dividend payout ratio be 34 00 34 88 35 56 38 25 42 52

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QUESTION 1 Damson Medical's stock trades at $60 a share. The Company is contemplating a 5-for-4 stock split. Assuming that the stock split will have

QUESTION 1

Damson Medical's stock trades at $60 a share. The Company is contemplating a 5-for-4 stock split. Assuming that the stock split will have no effect on the total market value of the equity, what will be the company's stock price per share following the stock split?

$37.50

$48.00

$52.00

$60.00

$73.50

10 points

QUESTION 2

Vicars Industries stock trades at $65 a share. The Company is considering a 10% stock dividend. Assuming that the stock dividend has no effect on the total market value of the equity, what will be the company's stock price per share following the stock dividend?

$59.09

$66.67

$73.91

$84.46

$91.35

10 points

QUESTION 3

Perez Industries has net income of $1,406,000 and it has 894,000 shares of common stock outstanding. The company's stock currently trades at $24.75 a share. The company is considering a plan in which it will use some available cash to repurchase 5% of its shares in the open market. The repurchase is expected to have no effect on either net income or the company's P/E ratio. What will be its stock price following the stock repurchase?

$26.05

$33.33

$40.69

$48.37

$68.68

10 points

QUESTION 4

After a 4-for-1 stock split, Xtreme Sporting Goods paid a dividend of $1.12 per new share, which represents a 3% increase over last year's pre-split dividend. What was last year's dividend per share?

$4.35

$5.03

$6.19

$7.59

$8.07

10 points

QUESTION 5

Peregrino Bay Inc. has a 3-month backlog of orders for its products. To meet this demand, management wants to expand production capacity by 40% by investing $1.75 million in plant and machinery. The firm wants to maintain its current 35% debt-to-total-assets ratio in its capital structure; it also wants to maintain its policy of paying out 30% of last year's net income as dividends to its shareholders. If last year's net income was $344,000, how much external equity must the company seek at the beginning of this year in order to expand capacity as desired? Assume the firm uses only debt and common equity in its capital structure.

$699,000

$729,000

$842,000

$896,700

$909,000

10 points

QUESTION 6

Gold's Inc. is considering three independent projects, each of which requires a $375,000 investment. The cost of capital for the projects vary because the projects have different levels of risk. Project A has estimated internal rate of return (IRR) of 10% and a cost of capital of 12%, Project B has estimated internal rate of return (IRR) of 14% and a cost of capital of 11%, Project C has estimated internal rate of return (IRR) of 13% and a cost of capital of 10%. The company's optimal capital structure calls for 28% debt and 72% common equity. The company expects to have net income of $1,500,000. If the company's dividend is established using the residual model, what will be its dividend payout ratio?

44.00%

56.00%

60.00%

64.00%

70.00%

10 points

QUESTION 7

Wilson Corp. wants to determine its annual dividend. The company just reported net income of $2,052,000 on sales of $16,416,000 and has 610,000 shares of stock outstanding. The stock is currently trading at $57.75 per share. Last year, the company had a 45% dividend payout ratio. If management wants to maintain this payout ratio in the current year, what will its dividend per share be?

$0.91

$1.25

$1.51

$2.05

$2.60

10 points

QUESTION 8

Last year Wilkes Corp. reported net income of $3,736,000 on sales of $33,450,000 and had 945,000 shares of stock outstanding. The company had a 20% dividend payout ratio. What was the company's dividend per share last year?

$0.79

$0.99

$1.06

$1.29

$1.75

10 points

QUESTION 9

Yarmouth Corp. just reported net income of $2,450,000 on sales of $21,400,000 and has 700,000 shares of stock outstanding. The stock is currently trading at $40.00 per share. Last year, the company had a 40% dividend payout ratio. Management has determined that if it keeps its payout ratio the same this year as last, its per-share dividend for the current year will be $1.40 per share. What will its dividend yield be?

2.05%

3.00%

3.22%

3.38%

3.50%

10 points

QUESTION 10

Yarrow Corp. just reported net income of $2,900,000 on sales of $29,700,000 and has 900,000 shares of stock outstanding. The stock is currently trading at $50.00 per share. Last year, the company had a 50% dividend payout ratio and paid a dividend per share of $1.37. Management has decided to pay the same dividend per share this year as last. What will its dividend payout ratio be?

34.00%

34.88%

35.56%

38.25%

42.52%