A company wants to return funds without signalling that all future dividends will be raised abnormally. Which of the following is the simplest method to adopt?
a) Interim dividends.
b) Special dividends.
c) Share buy-backs.
d) Scrip dividends.
Please elaborate on the answer
A company wants to return funds without signalling that all future dividends will be raised abnormally. Which of the following is the simplest method to adopt?
a) Interim dividends.
b) Special dividends.
c) Share buy-backs.
d) Scrip dividends.
Please elaborate on the answer
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Consolidated Pasta is currently expected to pay annual dividends of $10 a share in perpetuity on the 2.5 million shares that are outstanding. Shareholders require a 10% rate of return from Consolidated stock.
Consolidated now decides to increase next yearâs dividend to $20 a share, without changing its investment or borrowing plans. Thereafter the company will revert to its policy of distributing $10 million a year. Please answer letters C-f
c. | How much new equity capital will the company need to raise to finance the extra dividend payment?(Enter your answer in millions.)
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