Explain company creates value for its shareholders in a year
Is this true that a company creates value for its shareholders in a year when this distributes dividends or when the quotation of the shares increases?
Expert
No. A company creates value to shareholders if the return they find is higher than required return. To create value, it is essential that the return on dividends plus the return because of price increases be superior to the required return; this is not enough if this is a positive number.
Cheever Corp stock is selling at $40 a share. Its dividend in subsequent year will be $2 a share and its β is 1.25. Crane Company has similar growth rate as Cheever. The current stock price of Crane is $55 a share, and its dividend this year is $3. The riskless r
Stanley invested in a municipal bond which promised an annual yield of 6.7 %. The bond pays coupons twice a year. What is the effective annual yield (abbreviated as EAY) on this investment? (1) 13.4% (2) 6.81% (3) 6.70% (4) None of the above
When my company is not listed, therefore the investment banks apply an illiquidity premium. In fact, they say this is an illiquidity premium but then they call this a small cap premium. Only one of the banks, apparently based upon Tit
The ROE is the ratio among net income and Shareholders’ equity. The meaning of Return on Equity is return to shareholders. Therefore, is ROE a correct measurement of the return to shareholders?
Sometimes, companies accuse investors of performing credit sales which they make their quotations fall. Is it true?
Explain the branching structure of the binomial model.
Solve for the stated annual rate, r equal to the continuously compounded rate of return implicit in turning $1 at the end of 1925 (beginning of 1926) into these reported valued from RWJ9 in 2008 Figure below: 1. Determine the state
Effective Utilization of Funds: It is just the decision to maximize the return on investment of funds. When finance manager is not capable to raise the return by investing fund in profitable assets or other profitable projects, company’s busines
Case Study 1 You work in Walt Disney Company's corporate finance and treasury department and have just been assigned to the team estimating later today. You quickly realize that the information you need is readily available online. 1) Go to http://finance.yahoo.com. under " Market Summary," you
Capital goods: Goods employed in producing other goods are termed as capital goods.
18,76,764
1956653 Asked
3,689
Active Tutors
1448530
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!