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35) You own 600 shares of stock in Avondale Corporation. The company plans to pay a 35 dividend of $2.48 per share in one year and a final liquidating dividend of $20.10 per share two years from now. The required return on Avondale stock is 16.3 percent. What will your dividend income be this year if you use homemade dividends to create two equal annual dividend payments? A) $6,712 B) $6,270 C) $6,400 D) $6,376 E) $5,667 36) 36) Water Mills has a market value equal to its book value. Currently, the company has excess cash of $1,368, other assets of $35,807, and equity valued at $23,750. There are 2,500 shares of stock outstanding and net income is $470. What will the new earnings C) $.08 37) Built Rite Corp. is evaluating an extra dividend versus a share repurchase. In either case, per share be if the firm uses 25 percent of its excess cash to complete a stock repurchase? A) S.19 B) $.13 D) S.26 E) S.33 37) $7,500 would be spent. Current earnings are $1.24 per share, and the stock currently sells for $32 per share. There are 5,000 shares outstanding. Ignore taxes and other imperfections. You own one share of stock in this company. If the company issues the dividend, your total investment will be worth as com company opts for a share repurchase. pared to ifthe A) $27.50; $32.00 B) S30.50; $30.50 C) $27.50; $27.50 D) $32.00; $32.00 E) $27.50; $30.50 38) Josh's Inc. has 4,800 shares of stock outstanding with a par value of $1 per share and a 38)_ market value of $19 a share. The balance sheet shows $149,000 in the capital in excess of par account, $4,800 in the common stock account, and $192,800 in the retained eamings account. The firm just announced a stock dividend of 10 percent. What is the value of the capital in excess of par account after the dividend? A) $164,400 B) S161,300 S157,640 D) $152,280 $149,000 39) The common stock of Dayton Dry Goods has historically had a low dividend yield that is 39) expected to continue. As a result, the majority of its shareholders are individuals who prefer capital gains over cash dividends for tax reasons. The fact that most of these shareholders have similar characteristics is referred to as the effect. A) clientele B) market reaction C) information content D) distribution E) investor

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