What are alternative ways in which investors can receive a cash return from their investment in the equity of a company? From a tax standpoint, which of these would be preferred, assuming that investors the same 15% tax rate on income and capital gains? What are the pros and cons of paying out cash dividends?
Answer to relevant QuestionsDelta Corporation earned $2.50 per share during fiscal year 2011 and paid cash dividends of $1.00 per share. During the fiscal year that just ended on December 31, 2012, Delta earned $3.00 per share, and the firm’s ...Global Financial Corporation (GFC) has 10 million shares outstanding, each currently worth $80 per share. The firm’s managers are considering a plan to split the company’s stock 2-for-1, but they are concerned about the ...Stately Building Company’s shares are selling for $75 each and its dividend yield is 2.0%. What is the amount of Stately’s dividend per share? Casual Construction Corporation (CCC) earned $60,000,000 during 2012. The firm expects to earn $63,000,000 during 2013, in line with its long-term earnings growth rate. There are 20 million CCC shares outstanding, and the ...Briefly describe the following popular growth targets: (1) Accounting-based return on investment (ROI), (2) Economic value added (EVA®), (3) Target growth rate of sales or assets. Which is most widely used, and why?
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