Debt Policy at UST Inc. 1. What are the primary business risks associated with UST Inc.? What are the attributes of UST Inc.? Evaluate from the viewpoint of a bondholder. (Your answer should be more qualitative than quantitative!) The following factors weave into the risks and attributes of the company from the creditors’ point of view: A. UST had seven pending health related lawsuits at the end of 1998. The outcomes of these suits are uncertain. Despite the major Medicaid state settlements
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possesses. They are potentially investigating‚ if it is good to recapitalize is it right to repurchase the shares with the debt or to pay dividends with the entire debt. There are major changes that take place in the following list of questions given to us and the following answers are answered according to the questions order. The answers are tabulated below. | Dividends | Repurchase of stock | Outstanding shares | 232‚440‚000 | 183‚686‚000 | Book value of equity | $(1724) | $(1724) | Price per
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-Martin Industries just paid an annual dividend of $1.30 a share. The market price of the stock is $36.80 and the growth rate is 6.0 percent. What is the firm’s cost of equity? RE = [$1.30 × (1 + 0.060)] / $36.80 + 0.060 = 0.097446 = 9.74 percent (3) - The Bet-r-Bilt Company has a 5-year bond outstanding with a 4.30 percent coupon. Interest payments are paid semi-annually. The face amount of the bond is $1‚000. This bond is currently selling for 93 percent of its face value. What is the company’s
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balance between current dividends and capital gains that maximizes the firm’s stock price. Correct Answer: True Question 2 3 out of 3 points The dividend irrelevance theory‚ proposed by Miller and Modigliani‚ says that provided a firm pays at least some dividends‚ how much it pays does not affect either its cost of capital or its stock price. Correct Answer: False Question 3 3 out of 3 points MM’s dividend irrelevance theory says that while dividend policy does not affect a
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Introduction Anglo American Plc is a mining conglomerate and is one of the largest companies within the mining industry. It originally started in 1917 as a gold mining company going by the name of Anglo American Corp; the name was created when the initial starting capital of £1million was raised from U.K. and U.S. sources (Forbes 2006). In 1999‚ following a major strategic review‚ Anglo American merged with Luxembourg headquartered Minorco to form Anglo American Plc‚ with its primary stock exchange
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traditionally been a significant indicator for investors. SWA has shown numbers in the 29-46% percent range for the three-year period ending in 2002. Two other economic indicators‚ which SWA exceeds the industry is dividend payout ratios‚ and dividend yields. With payout ratios of 2.7 to 18.1 and dividend yields of 0.44‚ Southwest Airlines should be at the top of the list for investors of airlines. On top of all the excellent indicator information‚ SWA posted a $417‚338‚000 profits. How did they do this‚ when
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Unilever Financial Analysis Thuy Tran Tania Vaswani Pardis Anvari Taran Kandhari 13981068 14042506 14105445 14008599 1 Table of Contents 1-Executive summary ......................................................................................................................... 3 2-Introduction ..................................................................................................................................... 4 2.1-About FMCG Industry.............................
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SOUTHEASTERN STEEL COMPANY Dividend policy Southeastern Steel Company (SSC) was formed 5 years ago to exploit a new continuous casting process. SSC’s founder‚ Donald Brown and Margo Valencia‚ had been employed in the research process (which Brown and Valencia had developed)‚ they decided to strike out on their own. One advantage of the new process was that it required relatively little capital in comparison with the typical steel company‚ so Brown and Valencia have been able to avoid issuing new
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Business Accounts – Assignment I Introduction Next plc is a retailer founded 1864 in the United Kingdom‚ that not only sells men’s‚ women’s and children’s wear but also has a home ware department. Their clothes wear are stylish but affordable. Throughout the United Kingdom and Ireland there are over 550 Next stores plus 50 franchises operating in Asia‚ Europe and The Middle East. This report will analyse and outline the company’s profitability‚ liquidity‚ solvency and investment potentials based
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Subject: Dividend Policy at FPL Group‚ Inc. Problem: Should FPL cut dividend? And should Stark revise her investment recommendation? Options: 1) Keep dividend per share growth at 1.65% 2) Dividend per share grows at 1% 3) Keep dividend per share constant at $2.46 4) Cut dividend by 30% and repurchase 10 million shares each year after the cut Recommendations: We recommend FPL to cut dividend by 30% in order to free up more cash to facilitate its growth and fight the upcoming competitions
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