Question

In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two...

In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two plans. The values represent dividends per share. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Plan A Plan B 1 $ 1.80 $ 0.30 2 1.80 2.00 3 1.80 0.50 4 2.20 6.00 5 2.20 1.50

a. How much in total dividends per share will be paid under each plan over five years? (Do not round intermediate calculations and round your answers to 2 decimal places.)

b-1. Mr. Bright, the Vice-President of Finance, suggests that stockholders often prefer a stable dividend policy to a highly variable one. He will assume that stockholders apply a lower discount rate to dividends that are stable. The discount rate to be used for Plan A is 12 percent; the discount rate for Plan B is 15 percent. Compute the present value of future dividends. (Do not round intermediate calculations and round your answers to 2 decimal places.)

b-2. Which plan will provide the higher present value for the future dividends?

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two...
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two plans. The values represent dividends per share. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.      Year Plan A Plan B   1 $ 1.80 $ .50   2 1.80 2.20   3 1.80 .20   4 2.10 4.00   5 2.10 1.40    a. How much in total dividends per share will be paid under each plan...
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two...
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two plans. The values represent dividends per share. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Plan A Plan B 1 $ 1.60 $ 0.50 2 1.60 2.60 3 1.60 0.30 4 1.90 3.00 5 1.90 1.40 a. How much in total dividends per share will be paid under each plan over five...
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two...
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two plans. The values represent dividends per share. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Plan A Plan B 1 $ 1.40 $ 0.60 2 1.40 2.10 3 1.40 0.50 4 1.70 4.00 5 1.70 1.50 a. How much in total dividends per share will be paid under each plan over five...
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two...
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two plans. The values represent dividends per share. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Plan A Plan B 1 $ 1.20 $ 0.20 2 1.20 1.40 3 1.20 0.20 4 1.50 4.10 5 1.50 1.60 a. How much in total dividends per share will be paid under each plan over five...
Suppose you are going to receive $13,900 per year for five years. The appropriate discount rate...
Suppose you are going to receive $13,900 per year for five years. The appropriate discount rate is 8.8 percent. a-1. What is the present value of the payments if they are in the form of an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a-2. What is the present value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,...
The Landers Corporation needs to raise $1.70 million of debt on a 20-year issue. If it...
The Landers Corporation needs to raise $1.70 million of debt on a 20-year issue. If it places the bonds privately, the interest rate will be 12 percent. Twenty five thousand dollars in out-of-pocket costs will be incurred. For a public issue, the interest rate will be 11 percent, and the underwriting spread will be 3 percent. There will be $110,000 in out-of-pocket costs. Assume interest on the debt is paid semiannually, and the debt will be outstanding for the full...
Please show calculations/formulas. Suppose you are going to receive $12,800 per year for five years. The...
Please show calculations/formulas. Suppose you are going to receive $12,800 per year for five years. The appropriate interest rate is 7.7 percent.    a-1. What is the present value of the payments if they are in the form of an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a-2. What is the present value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to...
Robbins Petroleum Company is five years in arrears on cumulative preferred stock dividends. There are 890,000...
Robbins Petroleum Company is five years in arrears on cumulative preferred stock dividends. There are 890,000 preferred shares outstanding, and the annual dividend is $7.00 per share. The Vice-President of Finance sees no real hope of paying the dividends in arrears. She is devising a plan to compensate the preferred stockholders for 80 percent of the dividends in arrears. a. How much should the compensation be? (Do not round intermediate calculations. Input your answer in dollars, not millions (e.g. $1,234,000).)...
a. What is the future value in five years of $1,200 invested in an account with...
a. What is the future value in five years of $1,200 invested in an account with an annual percentage rate of 10 percent, compounded annually? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Future value $  Not attempted b. What is the future value in five years of $1,200 invested in an account with an annual percentage rate of 10 percent, compounded semiannually? (Do not round intermediate calculations and round your answer to 2...
Davis Chili Company is considering an investment of $65,000, which produces the following inflows: Year Cash...
Davis Chili Company is considering an investment of $65,000, which produces the following inflows: Year Cash Flow 1 $ 29,000 2 28,000 3 25,000 Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Determine the net present value of the project based on a zero percent discount rate. b. Determine the net present value of the project based on a 11 percent discount rate. (Do not round intermediate calculations...