1. Residual Dividend Model - Axel telecommunications has a target capital structure that consists of 70% debt and 30% equity. The company anticipates that its capital budget for the upcoming year will be $3,000,000. If axel reports net income of $2,000,000 and it follows a residual dividend payout policy, what will be its dividend payout ratio?
2. Stock Split - Gamma Medical's stock trades at $90 a share. The company is contemplating a 3 for 2 split. Assuming that the stock split will have no effect on the market value of its equity, what will be the company's stock price following the stock split?
3. Stock Repurchases - Beta Industries has net income of $2,000,000, and it has 1,000,000 shares of common stock outstanding. The company's stock currently trades at $32 a share. Beta is considering a plan in which it will use available cash to repurchase 20% of its shares in the open market. The repurchase is expected to have no effect on new income or the company's P/E ratio. What will be Beta's stock price following the stock repurchase?
4. Stock Split - After a 5-for-1 stock split, Strasburg Company paid a dividend of $0.;75 per new share, which represents a 9% increase over last year's pre-split dividend. What was last year's dividend per share?