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52. JAY Corp. is expected to pay a dividend of $5.00 per year indefinitely. If the appropriate
rate of return on this stock is 13 percent per year, and the stock consistently goes ex-dividend 30
days before dividend payment date, what will be the expected minimum price in light of the
dividend payment logistics?
53. JAY Corp. is expected to pay a dividend of $5.00 per year indefinitely. If the appropriate
rate of return on this stock is 13 percent per year, and the stock consistently goes ex-dividend 30
days before dividend payment date, what will be the expected maximum price in light of the
dividend payment logistics?
54. TJ Corp. is expected to pay a dividend of $3.00 per year indefinitely. If the appropriate
rate of return on this stock is 10 percent per year, and the stock consistently goes ex-dividend 45
days before dividend payment date, what will be the expected minimum price in light of the
dividend payment logistics?
55. CJ Corp. is expected to pay a dividend of $10.00 per year indefinitely. If the appropriate
rate of return on this stock is 15 percent per year, and the stock consistently goes ex-dividend 25
days before dividend payment date, what will be the expected minimum price in light of the
dividend payment logistics?
56. PQR Corp. is expected to pay a dividend of $1.50 per year indefinitely. If the appropriate
rate of return on this stock is 8 percent per year, and the stock consistently goes ex-dividend 25
days before dividend payment date, what will be the expected minimum price in light of the
dividend payment logistics?
57. ABC Corp. is expected to pay a dividend of $5.00 per year indefinitely. If the appropriate
rate of return on this stock is 5 percent per year, and the stock consistently goes ex-dividend 45
days before dividend payment date, what will be the expected minimum price in light of the
dividend payment logistics?
58. ABC Corp. is expected to pay a dividend of $5.00 per year indefinitely. If the appropriate
rate of return on this stock is 5 percent per year, and the stock consistently goes ex-dividend 45
days before dividend payment date, what will be the expected maximum price in light of the
dividend payment logistics?
59. Suppose that a firm always announces a yearly dividend at the end of the first quarter of
the year, but then pays the dividend out as four equal quarterly payments. If the next such
"annual" dividend has been announced as $5, it is exactly one quarter until the first quarterly
dividend from that $5, the effective annual required rate of return on the company's stock is 14
percent, and all future "annual" dividends are expected to grow at 4 percent per year indefinitely,
how much will this stock be worth?
60. Suppose that a firm always announces a yearly dividend at the end of the first quarter of
the year, but then pays the dividend out as four equal quarterly payments. If the next such
"annual" dividend has been announced as $2, it is exactly one quarter until the first quarterly
dividend from that $2, the effective annual required rate of return on the company's stock is 15
percent, and all future "annual" dividends are expected to grow at 10 percent per year
indefinitely, how much will this stock be worth?
61. Suppose that a firm always announces a yearly dividend at the end of the first quarter of
the year, but then pays the dividend out as four equal quarterly payments. If the next such
"annual" dividend has been announced as $1, it is exactly one quarter until the first quarterly
dividend from that $1, the effective annual required rate of return on the company's stock is 10
percent, and all future "annual" dividends are expected to grow at 5 percent per year indefinitely,
how much will this stock be worth?
62. Suppose a firm pays total dividends of $750,000 out of net income of $2 million. What
would the firm's retention ratio be?
63. Suppose a firm pays total dividends of $489,000 out of net income of $5 million. What
would the firm's retention ratio be?
64. Suppose a firm pays total dividends of $125,000 out of net income of $500,000. What
would the firm's retention ratio be?
65. Suppose a firm has a dividend payout ratio of 25 percent and net income of $5 million.
What would be the annual addition to retained earnings?
66. Suppose a firm has a dividend payout ratio of 65 percent and net income of $5 million.
What would be the annual addition to retained earnings?
67. Suppose a firm has a retention ratio of 55 percent and net income of $7 million. How
much does it pay out in dividends?
68. Suppose a firm has a dividend payout ratio of 47 percent and net income of $7 million.
What would be the annual addition to retained earnings?
69. Suppose a firm has a retention ratio of 33 percent and net income of $6.25 million. How
much does it pay out in dividends?
70. Suppose a firm has a dividend payout ratio of 42 percent and net income of $9.25 million.
What would be the annual addition to retained earnings?
71. A firm has retained earnings of $11 million, a common shares account of $2 million, and
additional paid-in-capital of $6 million, and the firm just paid a 5 percent stock dividend. Assume
that fair market value is reflected in the relative size of both the common shares account and the
additional paid-in-capital account. Which of the following statements is correct?
