Question: Should a firm that pays higher dividends have a higher share value?

Should a firm that pays higher dividends have a higher share value?

Step by Step Solution

★★★★★

3.46 Rating (156 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

No Paying a dividend actually reduces share value by the amount o... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

99-B-A-F-S (1944).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Q:

Should a firm that has higher free cash flows have a higher value?

Q:

A firm that pays out 65% of its earnings as dividends has an accounting rate of return of 20%. Its P/E ratio is 10 and its earnings per share is 108 cents. (i) What is the price per share? (ii) What...

Q:

Consider a firm that pays no dividends. Next year's earnings are projected to be $1,500,000. The present value of growth opportunities is estimated to be $13,500,000. Suppose that there are 250,000...

Q:

1) In capital budgeting analysis, when a company must increase its working capital in order to support a new investment in fixed assets, 1. that working capital investment is depreciated over the...

Q:

8. Which of the following statements is most correct? A firm that pays higher dividends will be worth more than a similar company that pays lower dividends. The par value of a share of common stock...

Q:

Question 4 Time 6 pts 2 Given the following data on quarterly dividends for the last two years, test the hypothesis that Firm A pays higher dividends than Firm B. Assume that the dividends of both...

Q:

U Question 4 6 pts Time Ae 2 Given the following data on quarterly dividends for the last two years, test the hypothesis that Firm A pays higher dividends than Firm B. Assume that the dividends of...

Q:

1 A flow of unending and equal payments that occur at regular intervals of time is called a(n): A.amortized cash flow stream. B.perpetuity. C.indemnity. D.annuity due. E.amortization table. 1 points...

Q:

QUESTION 1 A flow of unending and equal payments that occur at regular intervals of time is called a(n): A.amortized cash flow stream. B.perpetuity. C.indemnity. D.annuity due. E.amortization table....

Q:

1 A flow of unending and equal payments that occur at regular intervals of time is called a(n): A.amortization table. B.annuity due. C.indemnity. D.amortized cash flow stream. E.perpetuity. 1 points...

Q:

Draw a diagram to show the flow of manufacturing costs.

Q:

Lecture 9: Vector spaces Course Instructor: Dr. Surabhi Tiwari 1) Let V be the set of all ordered pairs (x, y), where x, y are real numbers. Let a= (x, y,) and b-(x,, y) be two elements in V. Define...

Q:

Inquiries of warehouse personnel concerning possible obsolete or low - quality inventory items provide assurance about management's assertion of:

Q:

2. Does your state provide for an acceleration of rent in the event of a tenants default? Research the issue thoroughly and provide authority either for accelerated rent or for the denial of...

Q:

Under current U.S. accounting standards, acquirers are required to capitalize goodwill and report any subsequent declines in value as an impairment charge. What performance metrics would you use to...

Q:

As an external adviser to the U.S. governments interagency committee that vets foreign takeovers, you have been asked to provide expert testimony on the proposed takeover of a major US airport by a...

Q:

Amazons inventory increased from $3.2 billion on December 31, 2010, to $5.0 billion one year later. In addition, sales for the fourth quarter of those years increased from $12.9 billion in 2010 to...

Q:

Dillon Labs has asked its financial manager to measure the cost of each specific type of capital as well as the weighted average cost of capital. The weighted average cost is to be measured by using...

Q:

Assume that your company recently reported net income of $2,100,000, a tax rate of 40 percent, had interest expense of $400,000 on $10,000,000 of debt, and a return on assets (ROA) of 7 percent. Also...

Q:

The Bowman Corporation has $20 million bond obligation outstanding, which is considering refunding. Though the bonds were issued at 12 percent, the interest rates on similar issues have declined to...