What condition would have to be necessary in order for the riskiness of the firm’s cash flows to investors to be affected by the firm’s dividend payout policy?
Answer to relevant QuestionsExplain how an announced increase in a firm’s dividend payout might be perceived as either a good or a bad information signal. MMK Cos. Normally pays an annual dividend. The last such dividend paid was $2.25, all future dividends are expected to grow at a rate of 7 percent per year, and the firm faces a required rate of return on equity of 13 ...Suppose a firm has a retention ratio of 40 percent, net income of $17 million, and 10 million shares outstanding. What would be the dividend per share paid out on the firm’s stock? What is venture capital? Why would an investment bank use a syndicate to assist in underwriting debt or equity securities?
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