罗斯《公司理财》英文习题答案DOCchap018.docVIP

Chapter 18: Dividend Policy: Why Does It Matter? 18.1 February 16: Declaration date - the board of directors declares a dividend payment that will be made on March 14. February 24: Ex-dividend date - the shares trade ex dividend on and after this date. Sellers before this date receive the dividend. Purchasers on or after this date do not receive the dividend. February 26: Record date - the declared dividends are distributable to shareholders of record on this date. March 14: Payable date - the checks are mailed. Based on Miller and Modigliani reasoning, the stock will sell for $8.75. This is the same price you purchased the stock. When the stock goes ex-dividend the stock is expected to fall $0.75 a share. 18.3 a. If the dividend is declared, the price of the stock will drop on the ex-dividend date by the value of the dividend, $5. It will then trade for $95. b. If it is not declared, the price will remain at $100. c. Mann’s outflows for investments are $2,000,000. These outflows occur immediately. One year from now, the firm will realize $1,000,000 in net income and it will pay $500,000 in dividends. Since the only immediate financing need is for the investments, Mann must finance $2,000,000 through the sale of shares worth $100. It must sell $2,000,000 / $100 = 20,000 shares. d. The MM model is not realistic since it does not account for taxes, brokerage fees, uncertainty over future cash flows, investors’ preferences, signaling effects, and agency costs. 18.4 a. The ex-dividend date is Feb. 27, which is two business days before the record date. b. The stock price should drop by $1.25 on the ex-dividend date. 18.5 Knowing that share price can be expressed as the present value of expected future dividends does not make dividend policy relevant. Under the growing perpetuity model, if overall corporate cash flows are unchanged, then a change in dividend policy only changes the timing of the dividends. The