Questions from Financial Management

Q: Describe the three theories that have been advanced regarding whether investors in

Describe the three theories that have been advanced regarding whether investors in the aggregate tend to favor high or low dividend payout ratios. What results were reached from empirical tests of the...

Q: How should (a) signaling and (b)

How should (a) signaling and (b) the clientele effect be taken into account by a firm as it considers its dividend decision? Do signaling and clientele effects make it easier or harder to determine...

Q: Describe the residual dividend model. Explain how it operates and how

Describe the residual dividend model. Explain how it operates and how firms use it in practice. In your answer, discuss any influences signaling and the clientele effect might have on a firm’s decisio...

Q: If a company is thinking about distributing excess cash through a stock

If a company is thinking about distributing excess cash through a stock repurchase program in lieu of continuing to pay regular cash dividends, what are some factors it should consider before making t...

Q: What is a stock split? As an investor, would you

What is a stock split? As an investor, would you like to see shares you own be split?

Q: Operating cash flows, rather than accounting profits, are used in

Operating cash flows, rather than accounting profits, are used in project analysis. What is the basis for this emphasis on cash flows as opposed to net income?

Q: In 2003, President Bush proposed a change in the tax law

In 2003, President Bush proposed a change in the tax law that would have eliminated the tax on dividends received by stockholders. The same proposal also would have increased the basis of stocks by th...

Q: What is business risk? List and then discuss some factors that

What is business risk? List and then discuss some factors that affect business risk.

Q: What is financial risk? How is it related to business risk

What is financial risk? How is it related to business risk?

Q: Who are Modigliani and Miller (MM), and what were their

Who are Modigliani and Miller (MM), and what were their conclusions regarding the effect of capital structure on a firm’s value and cost of capital under the assumption of no corporate taxes? How do t...