Company XYZ made a profit of $25 million last year. It paid its shareholders $30 million in dividends. What are the results?
a) Retained earnings are -$5 million and book value increase by $5 million
b) Retained earnings are $5 million and book value decrease by $5 million
c) Retained earnings are -$5 million and book value decrease by $5 million
d) There are no "results" because the situation cannot exist!
Answer: c) Retained earnings are -$5 million and book value decrease by $5 million
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Utility Muffin Research Kitchen Inc is financed with debt, preferred stock and common equity. Selected information for each of the securities is provided in the table below
Calculate the capital structure weights which would be used to calculate the weighted average cost of capital. Long-term Debt: $5M Face Value, Coupon Rate = 3.5%, Annual Coupons, Time to Maturity = 10 Years, YTM = 5%. Preferred Shares: 0.5M Shares outstanding, Par Value = $10 per share, Dividend Rate (Annual) = 4%, Equivalent preferred shares yield 7%. Common Shares: 0.5M Shares outstanding, Market price per share = $20. A) Wd = 0.26, Wp = 0.17, We = 0.58 B) Wd = 0.22, Wp = 0.28, We = 0.50 C) Wd = 0.41, Wp = 0.13, We = 0.46 D) Wd = 0.36, Wp = 0.23, We = 0.41 E) Wd = 0.35, Wp = 0.20, We = 0.45
In a short essay, describe four traits that characterize visionary leaders, and explain why these traits are especially necessary for a firm that operates within a global matrix structure
What will be an ideal response?