Question 1

Which two of the following are limits on the use of share repurchases?

Accepted Answer

A)  The firm must gain permission of shareholders. 
B)  The size of the repurchase must not exceed 10 per cent of the original share issue. 
C)  Initial sales must not be made to existing shareholders. 
D)  There must be no creation of an artificial market in the company's shares. 
A)  The firm must gain permission of shareholders. 
B)  The size of the repurchase must not exceed 10 per cent of the original share issue. 
C)  Initial sales must not be made to existing shareholders. 
D)  There must be no creation of an artificial market in the company's shares.

Question 2

In Miller and Modigliani's perfect world, what is likely to happen after a company announces a policy of high near- term dividends?

Accepted Answer

A)  Changes to the share price are unpredictable. 
B)  The share price will decrease. 
C)  There will be no change to the share price. 
D)  The share price will increase. 
A)  Changes to the share price are unpredictable. 
B)  The share price will decrease. 
C)  There will be no change to the share price. 
D)  The share price will increase.

Question 3

What term is used for a process in which a company pays a larger than normal dividend on a one- off basis?

Accepted Answer

A)  Scrip dividend 
B)  Interim dividend 
C)  Special dividend 
D)  Share buy- back 
A)  Scrip dividend 
B)  Interim dividend 
C)  Special dividend 
D)  Share buy- back

Question 4

Which three of the following accurately describe taxation of an individual's capital gains in the UK or US?

Accepted Answer

A)  Taxation on shares held for a number of years falls considerably. 
B)  Taxation policy encourages people with high income to buy shares which provide high dividends. 
C)  Tax is only paid on realised gains. 
D)  Capital gains are taxed at the individual's marginal rate. 
A)  Taxation on shares held for a number of years falls considerably. 
B)  Taxation policy encourages people with high income to buy shares which provide high dividends. 
C)  Tax is only paid on realised gains. 
D)  Capital gains are taxed at the individual's marginal rate.

Question 5

In which three ways may a share repurchase be accomplished?

Accepted Answer

A)  By making arrangements with certain shareholders 
B)  By offering shares to existing lenders 
C)  By offering shares in the stock market 
D)  By inviting shareholders to tender for purchase 
A)  By making arrangements with certain shareholders 
B)  By offering shares to existing lenders 
C)  By offering shares in the stock market 
D)  By inviting shareholders to tender for purchase

Question 6

How does the clientele influence dividend policy?

Accepted Answer

A)  It discourage stability in dividend policy. 
B)  It encourages firms to follow a residual policy. 
C)  It encourages stability in dividend policy. 
D)  It focuses the company's policy on taxation reduction. 
A)  It discourage stability in dividend policy. 
B)  It encourages firms to follow a residual policy. 
C)  It encourages stability in dividend policy. 
D)  It focuses the company's policy on taxation reduction.

Question 7

According to Gordon, how do investors perceive the risk associated with more distant dividends?

Accepted Answer

A)  As being irrelevant 
B)  As tending to zero as the time horizon increases 
C)  As subject to more risk than near- future dividends 
D)  As subject to less risk than near- future dividends 
A)  As being irrelevant 
B)  As tending to zero as the time horizon increases 
C)  As subject to more risk than near- future dividends 
D)  As subject to less risk than near- future dividends

Which two of the following are limits on the use of share repurchases?

In Miller and Modigliani's perfect world, what is likely to happen after a company announces a policy of high near- term dividends?

What term is used for a process in which a company pays a larger than normal dividend on a one- off basis?

Which three of the following accurately describe taxation of an individual's capital gains in the UK or US?

In which three ways may a share repurchase be accomplished?

How does the clientele influence dividend policy?

According to Gordon, how do investors perceive the risk associated with more distant dividends?

The Financial World

Project Appraisal: Net Present Value and Internal Rate of Return

Project Appraisal: Cash Flow and Applications

The Decision-Making Process for Investment Appraisal

Project Appraisal: Capital Rationing, Taxation and Inflation

Risk and Project Appraisal

Portfolio Theory

The Capital Asset Pricing Model and Multi-Factor Models

Stock Markets

Raising Equity Capital

Long-Term Debt Finance

Short-Term and Medium-Term Finance

Stock Market Efficiency

Value-Based Management

Value-Creation Metrics

The Cost of Capital

Valuing Shares

Capital Structure

Dividend Policy

Mergers

Derivatives

Future Value of 1 at Compound Interest

Present Value of 1 at Compound Interest

Present Value of an Annuity of 1 at Compound Interest

Filters

Exam 22: Managing Exchange-Rate Risk

Which two of the following are limits on the use of share repurchases?

In Miller and Modigliani's perfect world, what is likely to happen after a company announces a policy of high near- term dividends?

What term is used for a process in which a company pays a larger than normal dividend on a one- off basis?

Which three of the following accurately describe taxation of an individual's capital gains in the UK or US?

In which three ways may a share repurchase be accomplished?

How does the clientele influence dividend policy?

According to Gordon, how do investors perceive the risk associated with more distant dividends?

The Financial World

Project Appraisal: Net Present Value and Internal Rate of Return

Project Appraisal: Cash Flow and Applications

The Decision-Making Process for Investment Appraisal

Project Appraisal: Capital Rationing, Taxation and Inflation

Risk and Project Appraisal

Portfolio Theory

The Capital Asset Pricing Model and Multi-Factor Models

Stock Markets

Raising Equity Capital

Long-Term Debt Finance

Short-Term and Medium-Term Finance

Stock Market Efficiency

Value-Based Management

Value-Creation Metrics

The Cost of Capital

Valuing Shares

Capital Structure

Dividend Policy

Mergers

Derivatives

Future Value of 1 at Compound Interest

Present Value of 1 at Compound Interest

Present Value of an Annuity of 1 at Compound Interest

Filters