Question

Out of the choices of cash dividend, stock dividend, stock repurchase, and interest payment, which are...

Out of the choices of cash dividend, stock dividend, stock repurchase, and interest payment, which are the payout policies to pay cash out to shareholders?

Homework Answers

Answer #1

Cash Dividend is dividend which is transferred as cash to shareholders. This cash is paid from the net income of the company after which retained earnings are calculated..
In stock dividend extra dividends are paid out to existing investors in ratio of their ratio of shares they hold.It is not a cash payment to shareholders.
In Stock repurchase companies pay the market value of shares to shareholders . Hence it is a cash payout to shareholders.
Interest payment is cash payment to bond holders and not shareholders.

Hence cash dividend and stock repurchase policies payout cash to shareholders.

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
Which of the following shareholders of Apple would prefer a stock repurchase to a dividend payment?...
Which of the following shareholders of Apple would prefer a stock repurchase to a dividend payment? Drexel University endowment fund John, a wealthy individual investor Goldman Sachs Corporation
A payment to shareholders from earnings or asset sales is called: A) share repurchase B) dividend...
A payment to shareholders from earnings or asset sales is called: A) share repurchase B) dividend C) stock split D) retained earnings
The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $2 per share,...
The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $2 per share, and there are 15,000 shares of stock outstanding. The market-value balance sheet for Payout is shown below.                     Assets Liabilities and Equity Cash $50,000      Equity $1,200,000      Fixed assets 1,150,000         So far, price of the share today is $80 per share and it will sell at $78 per share for tomorrow. Now suppose that Payout announces its intention to repurchase $15,000...
In which of the following situations might a stock repurchase result in increased firm value? when...
In which of the following situations might a stock repurchase result in increased firm value? when a firm executes a targeted repurchase in order to buy back shares from specific shareholders at above-market prices Stock repurchases never increase or decrease the value of the firm when a firm without any positive NPV projects executes a repurchase to distribute excess cash flow to the shareholders when a firm does an open market, rather than an auction-based, repurchase
The following data on the stock price and dividend payment of ABC. The dividends are paid...
The following data on the stock price and dividend payment of ABC. The dividends are paid out once a year at the end of the year. Below are stock prices prior to payout. Closing price in year t is same as the opening price of the year t + 1. Two investors, Jack and Jill, invested $1000 at the opening prices in 2015. Jack reinvests dividends at the end of every year. Jill stores the cash into her bank paying...
​(Repurchase of stock​) The Dunn Corporation is planning to pay dividends of ​$480 comma 000. There...
​(Repurchase of stock​) The Dunn Corporation is planning to pay dividends of ​$480 comma 000. There are 240,000 shares​ outstanding, and earnings per share are ​$5. The stock should sell for ​$52 after the​ ex-dividend date.​ If, instead of paying a​ dividend, the firm decides to repurchase​ stock, a. What should be the repurchase​ price? b. How many shares should be​ repurchased? c. What if the repurchase price is set below or above your suggested price in part a​? d....
Alpha Ltd are deciding whether to pay out 90 000 in accumulated cash in the form...
Alpha Ltd are deciding whether to pay out 90 000 in accumulated cash in the form of an extra dividend to shareholders or embark on a share repurchase scheme. Current profits are 3.40 per share and their shares currently trade for 35. Their abbreviated balance sheet before paying out the dividend is as follows: Equity 350 000 Bank/Cash 130 000 Debt 120 000/470 000    Other assets 340 000/470 000 Evaluate each alternative (i.e. pay the dividend or repurchase the shares)...
?(Repurchase of stock?) The Dunn Corporation is planning to pay dividends of ?$540 comma 000540,000. There...
?(Repurchase of stock?) The Dunn Corporation is planning to pay dividends of ?$540 comma 000540,000. There are 270 comma 000270,000 shares? outstanding, and earnings per share are ?$66. The stock should sell for ?$5050 after the? ex-dividend date.? If, instead of paying a? dividend, the firm decides to repurchase? stock, a. What should be the repurchase? price? b. How many shares should be? repurchased? c. What if the repurchase price is set below or above your suggested price in part...
Stock repurchase  The following financial data on the Bond Recording Company are​ available: Earnings available for...
Stock repurchase  The following financial data on the Bond Recording Company are​ available: Earnings available for common stockholders $900,000 Number of shares of common stock outstanding 450000 Earnings per share ($900,000/450,000) $2 Market price per share $24 Price/earnings (P/E) ratio ($24/$2) 12 The firm is currently considering whether it should use $450,000 of its earnings to help pay cash dividends of $1.00 per share or to repurchase stock at $25 per share. a. Approximately how many shares of stock can...
A corporation decided to repurchase stock of a shareholder who recently died. The corporation was in...
A corporation decided to repurchase stock of a shareholder who recently died. The corporation was in existence for three years and had lost $50,000 during this period. The original shareholders had invested $25,000 in the business, of which the deceased had invested $5,000. How much may the corporation pay for the stock of the deceased? Explain.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT