CP

504 CHAPTER 13 Capital Structure Decisions and Standard & Poor’s that its bonds would be downgraded if it issued more debt. ...

Afirm’soptimalcapitalstructureis that mix of debt and equity that maximizes the stock price .At any point in time, management ...

506 CHAPTER 13 Capital Structure Decisions Questions Define each of the following terms: a.Capital structure; business risk; fin ...

20 units, but (3) the sales price on all units will have to be lowered to $95,000 to permit sales of the additional output. The ...

508 CHAPTER 13 Capital Structure Decisions company’s EBIT is $13.24 million, and its tax rate is 15 percent. Pettit can change i ...

Mini Case 509 Assume you have just been hired as business manager of PizzaPalace, a pizza restaurant located adjacent to campus ...

510 CHAPTER 13 Capital Structure Decisions g .With the above points in mind, now consider the optimal capital structure for Pizz ...

Distributions to Shareholders: Dividends and Repurchases 511 14 Aprofitable company regularly faces three important questions. ( ...

512 CHAPTER 14 Distributions to Shareholders: Dividends and Repurchases Successful companies earn income. That income can then b ...

if a firm does not pay dividends, a shareholder who wants a 5 percent dividend can “create” it by selling 5 percent of his or he ...

514 CHAPTER 14 Distributions to Shareholders: Dividends and Repurchases tax is due at all—the beneficiaries who receive the stoc ...

Other Dividend Policy Issues 515 We cannot find a set of publicly owned firms that differ only in their dividend policies, nor c ...

516 CHAPTER 14 Distributions to Shareholders: Dividends and Repurchases Clientele Effect As we indicated earlier, different grou ...

Dividend Stability 517 To the extent that stockholders can switch firms, a firm can change from one divi- dend payout policy to ...

518 CHAPTER 14 Distributions to Shareholders: Dividends and Repurchases Years ago, when inflation was not persistent, the term ...

Establishing the Dividend Policy in Practice 519 equity (new common stock). This encourages firms to retain earnings so as to av ...

520 CHAPTER 14 Distributions to Shareholders: Dividends and Repurchases cost assumes that all new equity comes from retained ear ...

Establishing the Dividend Policy in Practice 521 would retain all of its net income ($60 million), thus pay no dividends. Moreov ...

522 CHAPTER 14 Distributions to Shareholders: Dividends and Repurchases have followed thelow-regular-dividend-plus-extraspolicy ...

Dividend Reinvestment Plans 523 ex-dividend date.In this case, the ex-dividend date is two days prior to December 6, or December ...