Facebook has never paid a dividend to its shareholders. Facebook's most recent financials reveal a return on

Fantastic news! We've Found the answer you've been seeking!

Question:

Facebook has never paid a dividend to its shareholders. Facebook's most recent financials reveal a return on equity (ROE) of 22.9% and a cost of equity capital (market capitalization rate) ranging between 8.3% to 10.4%.

Would you advise Facebook to begin making dividend payments to its shareholders? Explain your answer, must be at least one page?

Related Book For answer-question

Finance for Executives Managing for Value Creation

ISBN: 978-0538751346

4th edition

Authors: Gabriel Hawawini, Claude Viallet

See More Books

Posted Date: Apr 28, 2023 05:49 AM

See More Questions

Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
List three specific parts of the Case Guide, Objectives and Strategy Section (See below) that you had the most difficulty understanding. Describe your current understanding of these parts. Provide...
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
What is the main reason the Bike Company needs to report figures separately for its various areas of operation? Choose the correct answer. A Sales requires these figures to plan sales activities. B...
A farmer can spend $60/acre to plant pine trees on some marginal land. The expected real rate of return is 4%, and the expected inflation rate is 6%. What is the expected value of the timber after 20...
Sketch or graph and compare the first three eigenfunctions (8) with B n = 1, c = 1, and L = for t = 0, 0.1, 0.2, ,1.0.
Differentiate among the four principal types of selection techniques.
A citizen group raised funds to establish an endowment for the Eastville City Library. Under the terms of the trust agreement, the principal must be maintained, but the earnings of the fund are to be...
Gradually raise Social Security's full retirement age to 70. The age at which workers can become eligible for full Social Security benefits depends on when they were born. For people born before...
You are assessing internal control in the audit of the payroll and personnel cycle for Rogers Products Company, a manufacturing company specializing in assembling computer parts. Rogers employs...
Write the semi-developed formula of the following alkenes: a. 2-heptene b. 1,3,5-heptatriene c. 1,3-pentadiene
The purchase price of a bond on January 11, 2018 is $300. If the yield rate is j2 = 9.7%, how many days will it take for the dirty price to be at least $309.5.
If a cell was experiencing stress and protein degradation, what type of thermodynamic reaction would it run to build or repair protein? Would this reaction require energy? What energy coupling...
A financial institution currently holds a $1 million bond investment priced at 95% with 2 years remaining to maturity. It is likely that if the bond yield continues to decline the price of the bond...
does escherichia coli produce acid or alkaline result? How
A buyer is getting a fully amortized loan for $220,000 in the bank will give the buyer the alarm for 15 years at 5 1/2% for 30 years at 6 1/2% to the nearest cent what is the buyers difference?
Regional trading blocs, such as the EU and NAFTA, are growing in importance. What are the implications of these trading blocs for international business? Are they helpful or harmful? How may they...
Draw the major product for each of the following reactions: (a) (b) (c) 1) 9-BBN 2) H2O2, NaOH 1) Disiamylborane 2) H20, NaOH
Fiona Berling's division of McSystems generates a net operating profit after tax, or NOPAT, of $1 million on an invested capital base of $1 million. The weighted average cost of capital of Ms....
Briefly explain the distinction between the two items that make up each of the following pairs: a. Rights issue versus general cash offering b. Underwritten issue versus best efforts distribution c....
Albarval Co. expects its return on assets to be stable at 12 percent, assuming a tar get capital structure of 80 percent equity and 20 percent debt. Suppose that the firm's borrowing rate is 8...
Fill in the Blank. For a shaft carrying masses $m_{1}, m_{2}, \ldots$, Rayleigh's method gives the natural frequency as \[\omega=\left\{\frac{g\left(m_{1} w_{1}+m_{2} w_{2}+\cdots ight)}{m_{1}...
True or False. In the matrix iteration method, any computational error will not yield incorrect results.
Rayleigh's method a. Finds the natural frequencies and mode shapes of the system, one at a time, using several trial values for each frequency. b. Finds all the natural frequencies using trial...

Facebook has never paid a dividend to its shareholders. Facebook's most recent financials reveal a return on

Question:

Expert Answer:

SOLUTION The decision to pay dividends is one that requires careful consideration by any corporation especially one as large and successful as Facebook While some investors may prioritize dividend pay... View the full answer

Finance for Executives Managing for Value Creation

Students also viewed these finance questions