Dividend Critical Thinkings Samples For Students

Answer)

The Malaysian Economy which is known to be a robust economy with supportive government reforms, talented workforce and newly developed infrastructure. The country has turned out to be an attractive investment destination for the not only domestic but international investors. So the Sya Suka Berada di Sini- ‘’ I Like it Here’’ phrase is quite suited for referring to Malaysian Stock Exchange.

- Money Market Investment
- Stock Market investment

Money Market Investment:

This region of investment opportunity is a risk less investment where the investors, invest their funds in highly liquid financial instruments of commercial banks primarily in Saving Bank Accounts, Fixed Deposits ...

Introduction

Graham and Harvey surveyed about 4,440 firms chief finance officers, and only 392 reviews came back. Large enterprises rely primarily on present value methods, capital structure and capital asset pricing models whereas small businesses likely use the payback period technique (Graham 12). Companies are more concerned about sustaining financial flexibility, healthy credit rating, stock appreciation, and EPS (earnings per share) dilution, especially when the entities are issuing equity. Little evidence was also found that organizational executives have a great concern about asymmetric information, personal taxes, free cash flows, and asset substitution. There is also some support for trade ...

Financial managers consider various parameters when deciding on the best source of capital. Ordinarily, their intention is to ensure corporations employ sources of capital with the least costs enabling the attainment of the shareholders objective of wealth maximization. However, the use of low cost sources of capital such as debt capital may lead to high risks of bankruptcy due to illiquidity of the firm. This necessarily requires corporations to use various sources of capital that not only minimizes the cost, but also keeps risks at bay. It is for this reason that knowledge on the costs of individual sources ...

1. How would you characterize competition in the gaming industry in Macau?
Macau is one of the biggest gambling hubs in the world and is especially attractive because it is the only place in China where gambling is legal. Many companies wish to open casinos or hotels in this former Portuguese colony.
However, with casinos it is not that simple. Legally, there is no competition in the Macau gambling industry as the Executive of Macau SAR has a monopoly over all gaming business (Pereiro, 2010). It can sign concession agreements with companies granting them the right to open ...

Answer 1)

Since at 40% debt and 60% equity, WACC is minimized and stock price is maximized, the 40(debt):60(equity) is the optimal capital structure for Jackson.

Answer 2)

a. Expected EPS for Firm C:
E(EPSC) = 0.1($2.40) + 0.2($1.35) + 0.4($5.10) + 0.2($8.85) + 0.1($12.60)
= $0.24 + $0.27 + $2.04 + $1.77 + $1.26 = $5.58.
b) According to the standard deviations of EPS, Firm B is the least risky, while C is the riskiest.However,this analysis does not consider portfolio effects—if C’s earnings increase when most other companies’ decline (that is, its beta is low), its apparent riskiness would ...

Modern option pricing models are usually regarded as some of the most complex mathematical models in applied finance. However, these models have enabled financial analysts and savvy investors to calculate the value of stock options with alarming accuracy. Most of the modern option pricing models employed in determining the value of stock options are rooted in the Black and Scholes model which was developed by Myron Scholes and Fisher Black. The Black and Scholes model was first published in 1973 in the Journal of Political Economy in a paper titled “The Pricing of Options and Corporate Liabilities”. Although the Black ...

Business is defined as the buying and selling at a profit. In simple terms, all business establishments are geared towards profit maximization for the shareholders. The shareholders or owners of the company may derive benefits from the firm in either capital gain through the appreciation of the price of their shares, or through the regular dividends paid out by the firm. The decision on whether to pay out dividends will be dependent on a numbers of factors. Key among them is the development stage of the company. Most established companies have the ability to pay huge dividends since they have invested ...