Price & Battisti just paid $2.40 per share to its shareholders. The cash for these payments did not come from the firm’s earnings; instead, the cash came from selling certain assets of the firm. What are these payments to shareholders called?
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Price & Battisti just paid $2.40 per share to its shareholders. The cash for these payments did not come from the firm’s earnings; instead, the cash came from selling certain assets of the firm. What are these payments to shareholders called?
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- Southwestern Wear Inc. has the following balance sheet: The trustees costs total 281,250, and the firm has no accrued taxes or wages. The debentures are subordinated only to the notes payable. If the firm goes bankrupt and liquidates, how much will each class of investors receive if a total of 2.5 million is received from sale of the assets?Which of the following statements are false? (you may choose more than one statement) A The issue of ordinary shares will not dilute ownership of the company B A rights issue will not dilute ownership of the company C A bonus issue is a means of raising finance for the business D A company can decide on the level of dividends they pay out to ordinary shareholders each yearWhich of the following statements is true? a. High liquidity means a company is short on cash and may be unable to pay its debts.b. When a company decides to go public through an IPO, it is typically targeting to sell its shares to only a handful of shareholders. c. If the company has a higher than expected extremely high profit this year, equity holders will benefit more than debt holders as debtholders are the residual claimers for the cash flows of the company.d. In the extreme case, the debt holders take legal ownership of the firm's assets through a process called bankruptcy.e. Equity holders expect to receive dividends and the firm is always legally obligated to pay them.
- Does the offer of receiving cash dividend and stock repurchase make any differences to an individual shareholder of the company? Why? (Assume that the company will spend same amount of money on either alternative.)Company A pays its managers a fixed cash salary. Company B adds ‘Short Term Incentives’ which involve extra cash payments linked to profits. Company C pays part of the compensation in company shares. Which Company’s compensation is most likely to mitigate conflicts of interest between managers and shareholders?This is a multi part question: 1. A. How much has been earned by the company’s operations but not distributed to shareholders? B. What is the total investment by shareholders? C. How much do customers owe the company?
- The cash generated by a corporation that is available to pay the company's investors is measured by: _________ I was thinking the answer would be Net Income, but I wasn't sure. Thank you!18. Which of the following statements is true? A. Payment on interest on debt is considered an expense, while payment of dividends is a return on capital. B. Unpaid common stock dividends can result in liquidation of the firm. C. One of the costs of issuing equity is the possibility of financial distress, while no financial distress is associated with debt. 19. In the real world with the presence of corporate taxation, MM Proposition I that VL- Vu does not hold because: A. levered firms pay less taxes compared with identical unlevered firms. B. bondholders require higher rates of return compared with stockholders. C. dividends are no longer relevant with taxes. 20. AI Robotics Company will earn $120 in one year if it does well. The debtholders are promised payments of $80 in one year if the firm does well. If the firm does poorly, expected earnings in one year will be $20 and the repayment to debtholders will only be $10 because of financial distress cost. The probability of the firm…Which sort of firm must pay taxes on its cash payments to its shareholders?
- Suppose managers of a firm know that the company is approaching financial distress. Should the managers borrow from creditors and issue a large one-time dividend to shareholders? How might creditors control this potential transfer of wealth?9. A corporation is A. An entity owned by shareholders. В. an entity with limited liability privilege. C. a separate legal entity. D. All of the above. 10. By looking at the statement of cash flows, which of the following issues will be analyzed by the management of a firm? A. Whether the firm is able to pay cash dividend. B. How the firm financed an investment in additional fixed assets. C. How much of the short-term debt is being used to finance fixed assets. D. All of the above.Is it the creditors who can earn the interest, but not the shareholders? Shareholders can only earn dividends. correct? So what does the first sentence mean? "Own a significant interest in the company" and "Siemens is called a parent company?" And the second paragraph says shares? Seems it is talking about dividends instead of interest?