The Fourth Corp. is evaluating extra cash dividends versus share repurchases. In either case, $6,675 will be spent. Current earnings are $2.8 per share and the stock currently sells for $67 per share. There are 1,500 shares outstanding. Ignore taxes and any information asymmetry in the financial market. Which of the following is correct? Shareholder wealth is the same regardless of which payout policy is chosen. Shareholder wealth will be lower if the firm repurchases shares because shares outstanding is reduced as a result of the repurchase. Shareholder wealth will be lower if the firm pays extra cash dividends because share price is lower. Shareholder wealth will be higher if the firm repurchases shares because repurchases can boost share price.

REH​ Corporation's most recent dividend was $2.82 per​ share, its expected annual rate of dividend growth is 5​%, and the required return is now 15​%. A variety of proposals are being considered by management to redirect the​ firm's activities. Determine the impact on share price for each of the following proposed actions.   a.  Do​ nothing, which will leave the key financial variables unchanged. b.  Invest in a new machine that will increase the dividend growth rate to 8​% and lower the required return to 13​%. c.  Eliminate an unprofitable product​ line, which will increase the dividend growth rate to 9​% and raise the required return to 17%. d.  Merge with another​ firm, which will reduce the growth rate to 2​% and raise the required return to 18​%. e. Acquire a subsidiary operation from another manufacturer. The acquisition should increase the dividend growth rate to 9% and increase the required return to 17​%.

Explain how you will manage each of these situations. Your company invests in overseas companies paying high dividends. Due to COVID-19, foreign companies have reduced their dividend payouts.

Sunnyfax Publishing pays out all its earnings and has a share price of $37.00. In order to expand, Sunnyfax Publishing decides to cut its dividend from $3.00 to $2.00 per share and reinvest the retained funds. Once the funds are reinvested, they are expected to grow at a rate of 14%. If the reinvestment does not affect Sunnyfax's equity cost of capital, what is the expected share price as a consequence of this decision? O $45.87 $40.14 $68.81 $57.34 Suppose a ten-year, $1,000 bond with an 8.6% coupon rate and semiannual coupons is trading for $1,035.39. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)? 8.08% O4.04% O 5.36% O 10.72%

In a Modigliani and Miller world with no taxes, a 100% equity financed company has generated £1m cash flows this year.  Consider three alternative policies: 1) pay £1m to shareholders as dividends, 2) buy back £1m worth of shares, 3) retain all cash flows. Determine which of the following statements is correct.     The company's value is higher under policy 1     The company's value is higher under policy 2     Shareholders are indifferent between all three policies      Shareholders are indifferent between policy 1 and policy 2, but prefer both policies to policy 3

d. Determine what rate of return must be earned on the net proceeds to the corporation so there will not be a dilution in earnings per share during the year of going public. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. > Answer is complete but not entirely correct. Rate of return 27.74 % e. Determine what rate of return must be earned on the proceeds to the corporation so there will be a 5 percent increase in earnings per share during the year of going public. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. > Answer is complete but not entirely correct. Rate of return 11.42%