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Category > Business & Finance Posted 11 Jun 2017 My Price 8.00

The net income of Novis Corporation is $86,000.

The net income of Novis Corporation is $86,000. The company has 20,000 outstanding shares and a 100 percent payout policy. The expected value of the firm one year from now is $1,760,000. The appropriate discount rate for Novis is 12 percent, and the dividend tax rate is zero.

    

a.

What is the current value of the firm assuming the current dividend has not yet been paid? (Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).)

      

  Current value of the firm $   

  

b.

What is the ex-dividend price of NovisAc€?cs stock if the board follows its current policy? (Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).)

    

  Ex-dividend price $   

  

 

At the dividend declaration meeting, several board members claimed that the dividend is too meager and is probably depressing NovisAc€?cs price. They proposed that Novis sell enough new shares to finance a $5.50 dividend.

    

c-1.

Calculate the current value of the firm. (Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).)

    

  Current value of the firm $   

    

c-2.

If the proposal is adopted, at what price will the new shares sell? How many will be sold? (Do not round intermediate calculations and round your final answers to 2 decimal places (e.g., 32.16).)

    

   
  New share price $   
  Shares sold   
 

The net income of Novis Corporation is $86,000. The company has 20,000 outstanding shares and a 100 percent payout policy. The expected value of the firm one year from now is $1,760,000. The appropriate discount rate for Novis is 12 percent, and the dividend tax rate is zero. a. What is the current value of the firm assuming the current dividend has not yet been paid? (Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).) Current value of the firm $ b. What is the ex-dividend price of NovisAc€?cs stock if the board follows its current policy? (Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).) Ex-dividend price $ At the dividend declaration meeting, several board members claimed that the dividend is too meager and is probably depressing NovisAc€?cs price. They proposed that Novis sell enough new shares to finance a $5.50 dividend. c-1. Calculate the current value of the firm. (Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).) Current value of the firm $ c-2. If the proposal is adopted, at what price will the new shares sell? How many will be sold? (Do not round intermediate calculations and round your final answers to 2 decimal places (e.g., 32.16).) New share price $ Shares sold

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Status NEW Posted 11 Jun 2017 04:06 AM My Price 8.00

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