All categories

2 years ago

The share price falls when a dividend is paid because the reduction in cash decreases the?

1 answer:

5 0

The share price falls when a dividend is paid because the reduction in cash decreases the market value of assets.

After a stock price goes ex-dividend, the share price in the market typically decreases by the amount of the dividend paid in order to reflect the fact that new shareholders there are not entitled to that payment.

In the market, when the dividends are paid out as stock instead of cash, then this can dilute earnings, which can also have a negative impact on share prices in the short term.

Hence, there is still no direct connection between a company's dividend and its stock price.

To learn more about dividends here:

brainly.com/question/2960815

#SPJ4

You might be interested in

Farah Snack Co has earnings after taxes of $128, 750. Interest expense for the year was $20,000: preferred dividends paid were $

Leto [7]

Answer:

A. $0.90

Explanation:

Earning per share = (Net Income - dividends on preferred stocks)/average outstanding common shares

Particulars Amount

Earning After Tax 128750

Taxes 15000

Earning before Tax & Interest Expense 143750

Interest Expense (20000)

Earning after Interest, but before Tax 123750

Taxes (15000)

Earning after Taxes 108750

Preferred Dividends (18750)

Earning available for common stock holders 90000

common stock outstanding 100000

Earning per share 0.9

Therefore, The outstanding Earnings per share on the common stock was $0.90

8 0

4 years ago

In a recent year, BMW sold 217,044 of its 1 Series cars. Assume the company expected to sell 226,244 of these cars during the ye

True [87]

Answer:

The answers are:

+ Sales price variance: $65,113,200

+ Sales volume variance: $(239,200,000)

Explanation:

We have detailed calculations shown as below:

Sales price variance = ( Actual unit sales price - budgeted unit sales price) x actual unit sold = ( 26,300 - 26,000) x 217,044 = $65,113,200;

Sales volume variance = ( Actual unit sold - Budgeted unit sold) x budgeted unit sales price = (217,044 - 226,244) x 26,000 = $(239,200,000).

So, for BMW recent year, we have:

+ Sales price variance: $65,113,200;

+ Sales volume variance: $(239,200,000).

6 0

3 years ago

Read 2 more answers

What is secondary product?

vampirchik [111]

A secondary product is a product that comes out of a production process in addition to the main product. A secondary product can be directly consumed, used as an input in another production process, disposed of or recycled. A secondary product can be a by-product, a co- product or a residue.

3 0

3 years ago

William is interested in exercising more, but does not feel he has the time. Write a short response explaining how he can find t

solong [7]

Exercising doesn't mean you have to spend hours in the gym. Exercises can be done at the comforts of your home too, and there's plenty of exercise available, especially for those who have less time to do so. Just like for example, waiting time. While you are waiting for your clothes in the washing machine to finish, you may use this time to do some basic exercises such as running in place, jumping jacks or carrying weights.

4 0

3 years ago

1. Understanding opportunity costYou work as an assistant coach on the university basketball team and earn $15 per hour. One day

Gwar [14]

Answer:

The correct answer is letter "D": $24.

Explanation:

Opportunity cost can be defined as the cost of the best next available option after taking another decision in regards to a situation. It is also the return that the chosen option provides compared to the return that could have provided the option that was forgone.

In this case, choosing to go to the local carnival will represent losing one hour of working as a coach assistant ($15). Besides, as there is a $9 admission fee to the carnival, you will need to spend that money. Thus, the total opportunity cost of going to the carnival instead of working is $24 (<em>$15+$9=$24</em>).

6 0

3 years ago