The residual dividend policy approach to dividend policy is based on the theory that a firm's optimal dividend distribution policy is a function of the firm's target capital structure, the investment opportunities available to the firm, and the availability and cost of external capital. The firm makes distributions based on the residual earnings. Consider the case of Red Bison Petroleum Producers Group: 40% Debt 60% Equity Red Bison Petroleum Producers Group has generated earnings of $180,000,000. Its target capital structure consists of 60% equity and 40% debt. It plans to spend $88,000,000 on capital projects over the next year and expects to finance this investment in the same proportion as its capital structure. The company makes distributions in the form of dividends, What will Red Bison Petroleum Producers Group's dividend payout ratio be if it follows a residual dividend policy? 077.74% 60.07% 70.67% 42.40% What will Red Bison Petroleum Producers Group's dividend payout ratio be if it follows a residual dividend policy O 72.74% 60.07% 70.67% 42.40% assuming that all other factors are If Red Bison Petroleum Producers Group Increases its debt ratio, then its dividend payout ratio will held constant. Most firms have earnings that vary considerably from year to year and do not grow at a reliably constant pace. Furthermore, their required investment may change often. Which of these statements is the most accurate? A residual dividend policy can't be of any help to most firms. Most firms can still use the concepts behind a residual dividend policy to make long-run decisions about dividends. What will Red Bison Petroleum Producers Group's dividend payout ratio be if it follows a residual dividend policy 0 77.74% 60.07% 70.67% 42.40% assuming that all other factors are If Red Bison Petroleum Producers Group increases its debt ratio, then its dividend payout ratio will held constant Increase Most firms have earnings that vary considerably from year to year and do not grow at a reliably co decrease Furthermore, their required investmer may change often. Which of these statements is the most accurate? A residual dividend policy can't be of any help to most firms. Most firms can still use the concepts behind a residual dividend policy to make long-run decisions about dividends. C Gm Companies sometimes consider stock splits to bring down the price so that the stock attracts more purchases. Consider the following case: Mainway Toy Company currently has 10,000 shares of common stock outstanding. Its management believes that its current stock price of $100 per share is too high. The company is planning to conduct stock splits in the ratio of 3 for 1 as described in the animation 3 for 1 Stock split announcement cute 4 $4 If Mainway Toy Company dedares a 3 for 1 stock split, the price of the company's stock after the split, assuming that the total value of the firm's stock remains the same after the split, will be Fuzzy Muffin Manufacturing Company is one of Mainway's leading competitors. Puzzy Muffin Manufacturing Company's market intelligence research team shares Mainway's plans of announcing a stock split, Influencing the distribution policy makers. Consequently, executives at Puery Muffin decide to offer stock dividends to its shareholders, A stock dividend is another way of keeping the stock price from going too high. Fuzzy Muffin currently has 1,100,000 shares of common stock outstanding If the firm pays a 3% stock dividend, how many shares will the tirmissue to its existing shareholders O 34,650 shares 29,700 shares Adapt 28,050 shares O 33,000 shares If Mainway Toy Company dedares a 3-for-1 stock split, the price of the company's stock after the split, assuming that the total value of the firm's stock remains the same after the split, will be Fuzzy Muffin Manufacturing Company is one of $200.00 leading competitors. Fuzzy Muffin Manufacturing Company's market intelligence research team shares Mainway's plans of announcing a $400.00 influencing the distribution policy makers. Consequently, executives at Furry Muffin decide to offer stock dividends to its shareholders. $33.33 A stock dividend is another way of keeping the from going too high. Fuzzy Muffin currently has 1,100,000 shares of common stock $300.00 outstanding. $50.00 If the firm pays a 3% stock dividend, how many times in the firm issue to its existing shareholders? O 34,650 shares O 29.700 shares 28,050 shares O 33,000 shares Cantin Companies with excess cash often employ share repurchase plans in place of or along with cash dividends. Share repurchase plans can help investors liquidate their holdings by selling their stock to the issuing company and earning from capital gains. Consider the case of Sixty-second Avenue Company: Sixty-second Avenue Company expects to earn $5,300,000 this year. The company currently has 700,000 shares outstanding, and the shares have per-share market price of $19. Assuming that sixty-second Avenue's price-to-earnings (P/E) ratio remains constant and its earnings are unalteced by a share repurchase transaction, then the company's expected market price per share-if it repurchases 80,000 shares at the current market price should be Which of these factors are considered an advantage of a stock repurchase? Check all that apply. A repurchase can remove a large block of stock that is overhanging the market and keeping the per-share price depressed. The price of the firm's stock might benefit more from cash dividends than from a repurchase. When a firm distributes cash by repurchasing stock, stockholders have the option to either sell or not sell stock. Companies with excess cash often employ share repurchase plans in place of or along with cash dividends. Share repurchase plans can help investors liquidate their holdings by selling their stock to the issuing company and earning from capital gains. Consider the case of Sixty-second Avenue Company: Sixty-second Avenue Company expects to earn $5,300,000 this year. The company currently has 700,000 shares outstanding, and the shares have a per-share market price of $19. Assuming that Sixty second Avenue's price-to-earnings (P/E) ratio remains constant and its earnings are unaffected by a share repurchase transaction, then the company's expected market price per share-If it repurchases 80,000 shares at the current market price should be Which oft $25.33 Jrs are considered an advantage of a stock repurchase? Check all that apply. $21.11 use can remove a large block of stock that is overhanging the market and keeping the pershare price depressed $24.28 of the firm's stock might benefit more from cash dividends than from a repurchase. $20.05 Um distributes cash by repurchasing stock, stockholders have the option to either sell or not sell stock