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ladessa [460]
4 years ago
11

Formaggio Vecchio announced its regular quarterly cash dividend of $0.20 per share. Currently there are one million shares outst

anding.
Declaration date: October 24, 2006

Ex-dividend date: November 20, 2006

Record date: November 22, 2006

Payment date: December 15, 2006

On ____ will the stock price change to reflect the value of the dividend;
Formaggioâs stock price at the end of November is expected to be $20. The dividend yield is ____;
Suppose that the marginal tax rate on dividend is 15% and the marginal tax rate on capital gain is 10%, the stock price will fall by _____ after the ex-dividend date;
Suppose that the company decides to use the same amount of cash to buy back shares rather than to issue cash dividends. The company will buy back shares at the market price at the end of November. You currently hold 10000 shares, and you decide to sell 1000 shares during the repurchase. The percentage ownership after the repurchase is ____ ;
Suppose that the company decides to issue a 10% stock dividend instead of a cash dividend. The stock price will fall by ___ due to the dilution
Business
1 answer:
aleksandr82 [10.1K]4 years ago
5 0

Answer:

A.On Ex-dividend date: November 20, 2006

B.1%

C.$0.19

D. $1.82

Explanation:

1.On Ex-dividend date: November 20, 2006

will the stock price change to reflect the value of the dividend

b. Calculation for Formaggio’s dividend yield

Using this formula

Dividend yield = dividend/share price

Let plug in the formula

= .20/20 = 1%

c. Calculation of how much the stock price is likely to fall

0.20*(1 – 15%) = P*(1 – 10%)

Solve for P = $0.19

d. Calculation of How much is the stock price likely to fall Suppose that the company decides to issue a 10% stock dividend instead of a cash dividend.

$1,000,000 + (1,000,000 * 10%)

$1,000,00+$100,000

= 1,100,000 total shares

Hence,

$20,000,000 / 1,100,000 = $18.18 per share

$20 – 18.18 = $1.82 fall

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<u>Solution and Explanation:</u>

These companies with the businesses in Mexico are not affected due to the adverse exchange rates and have nullified it, because they have their operations in the neighboring nations such as Canada and USA. Here, These companies do not use Yen as a currency for the exchange and since Mexico has NAFTA agreement with the USA and Canada, then these companies take the benefits of the duty free trade. Hence, a superior quality, scale of production and savings in duty and tariff, will make them get better off and nullify the impact of the exchange rate.

So, these companies have done it with the help of use of local currency and the US dollar as exchange currencies, and benefit of free trade with the member nations of NAFTA. These companies can also export the goods to those nations such as Brazil, Argentina to cater the demand in these nations. Here also, Yen will not be used.

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4 years ago
In 2021, due to a change in marketing forecasts, Barney Corporation reduced the projected life of its patent for producing round
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With regards to this Barney's retained earnings as of December 31, 2021, would neither be understated or overstated but would be unaffected.

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3 years ago
Which sentences in this paragraph describe two government policies that liberalize the economy? The government of a country obse
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Where can you go in the Banking Center to review downloaded bank feed transactions that have already been matched to existing tr
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Answer:

Where can you go in the Banking Center to review downloaded bank feed transactions that have already been matched to existing transactions in QuickBooks Online?

a. For Reviewed tab

Explanation:

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Answer:

The new price of the bond is $928.94

Explanation:

Initially the bond's price is equal to its par value which means the coupon rate on bond and the market interest rates are the same i.e. 6%.

Th bond's price is calculated as the sum of the present value of the annuity of interest payments by the bond and the present value of the face value of the bond that will be received at maturity. The discount rate used to calculate the present values is the market interest rate.

As the bond is a semiannual bond, we will use the semi annual coupon payment, the semi annual percentage of the annual rate of interest on market and the number of semi annual periods outstanding.

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