How would the payment of dividends affect your company’s free cash flow, business and finance homework help

IMPORTANT NOTE: The thread discussion questions are an opportunity to go outside the box to demonstrate your analytical, integrative, problem- solving and critical thinking skills using the knowledge acquired in your readings. As a result, it is very important to pay close attention to the questions and be able to conduct your discussions in the context of your question.– Please keep this in mind when you complete this week’s assignments for me.

You must expand your ideas further. Analysis must be deep and very instructive.

ANSWER THE FOLLOWING QUESTIONS. Each question should be answered in at least 250 words. Quality of content and use of course and outside-of-course resources to support your position or analysis. When applicable, refer to your workplace using it and your own job as examples. The answers should not be in the form of essay, just straight to the point, in full sentences- Work must be original and cite your sources.

text book:

1. Your company which began with one of the selected projects has now been in operations for several years and consistently has shown a net profit each of those years.  While the number of shareholders has grown during the years your company has never paid any dividends.  The company treasurer would like to consider paying out dividends.   How would the payment of dividends affect your company’s free cash flow?   What concerns should you address related to future growth of your company if you pay out dividends to stockholders?

2. If you do decide to pay out dividends to stockholders you would also like to understand how investors might value the company based upon the dividend amounts.  Discuss the factors you would need to consider to estimate the company value using the dividend-discount model and assuming a constant dividend growth pattern.

1. Now your company wishes to sell more stock to raise capital for an expansion program.  If you company’s stock has a beta of 3.0 and other competitors in the same industry have an average beta of 1.75 what impact will that comparison have on the sale of a new issue of your company stock?  Describe the equation used to calculate beta and what actions could your company take to reduce the 3.0 beta.

2. You are still planning to sell more of your company stock to raise capital for the expansion program.  However, in your preparation for this stock sale you realize that your stock could be viewed as risky because of the possibility of crop failures and other natural disasters.  Discuss the differences between the various types of such risks and identify which risks investors can use diversification to reduce.