help with and assignment plz respond
i need help with following questions , plz take time to help me . i have to submit the assignment bfr end of this week the question is:
18.3 The Mann Company belongs to a risk class for which the appropriate discount rate is 10 percent. Mann currently has 100,000 outstanding shares selling at $100 each. The firm is contemplating the declaration of a $5 dividend at the end of the fiscal year that just began. Answer the following questions based on the Miller and Modigliani model, which is discussed in the text. 1. What will be the price of the stock on the ex-dividend date if the dividend is declared? 2. What will be the price of the stock at the end of the year if the dividend is not declared? 3. If Mann makes $2 million of new investments at the beginning of the period, earns net income of $1 million, and pays the dividend at the end of the year, how many shares of new stock must the firm issue to meet its funding needs? 4. Is it realistic to use the MM model in the real world to value stock? Why or why not?
Too academic. Bankers don't do academic. We do Microsoft.
From memory you can usually rebut MM with a bit of waffle about tax rates, costs of distress, debt burdens, management self-interest etc.
In theory the share price should fall by the exact amount of the dividend...
...wait a minute. Go and read your textbook. The question even tells you to do that.
i know bankers don't do academics but they have done this before becoming bankers , so i am asking bankers for help, i know its about mm but cant solve it , plz help
Hmm, maybe you should be taking a class in English as well.
heh, 18.3? I am assuming that its problem 18.3 you're trying to ask.
why dont you go ahead and take a stab at answers and then posters can give some constructive feedback, but dont come on here expecting people to give you answers to your assignments.
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