Question: JC Automobiles is a small auto parts manufacturing firm that
JC Automobiles is a small auto parts manufacturing firm that has paid $1.00 in annual dividends each year for the past five years. It announces that dividends will increase to $1.25 next year. What would you expect the price reaction to be? Why? If your answer is different from the previous problem, explain the reasons for the difference.
Answer to relevant QuestionsWould your answer be different for the previous problem if JC Automobiles were a large firm followed by thirty-five analysts? Why or why not? GL Corporation, a retail firm, is making a decision on how much it should pay out to its stockholders. It has $100 million in investible funds. The following information is provided about the firm: • It has 100 million ...Assume now that you have been asked to forecast cash flows that you will have available to repurchase stock and pay dividends during the next five years for Conrail (from Problem 18). In making these forecasts, you can ...The following regression was run using all NYSE firms in 1995 YIELD = 0.0478 − 0.0157 BETA + 0.0000008 MKTCAP + 0.006797 DBTRATIO + 0.0002 ROE −0.09 NCEX ∕TA R2 = 12.88% where BETA = beta of the stock, MKTCAP = market ...National City, a bank holding company, reported earnings per share of $2.40 and paid dividends per share of $1.06.Theearningshadgrown7.5%ayearovertheprior five years, and were expected to grow 6% a year in the long run. The ...
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