Question 1

Among owner considerations in the establishment of dividend policy, any of the following may enter into the decision EXCEPT

Accepted Answer

A)  the owners' investment opportunities. 
B)  the potential dilution of ownership. 
C)  restrictive constraints on the preferred stock. 
D)  the tax status of the owners. 
A)  the owners' investment opportunities. 
B)  the potential dilution of ownership. 
C)  restrictive constraints on the preferred stock. 
D)  the tax status of the owners.

Question 2

A firm that has a large percentage of _________investors may pay out a lower percentage of its  earnings as dividends.

Accepted Answer

A)  pension fund 
B)  middle-income 
C)  business 
D)  wealthy 
A)  pension fund 
B)  middle-income 
C)  business 
D)  wealthy

Question 3

In the dividend relevance arguments, current dividend payments are believed to reduce investor's uncertainty, thereby-all else being equal-placing a higher value on the firm's stock.

Accepted Answer

A) True 
 B)False

Question 4

Holders of record are stockholders whose names are recorded on the date of record.

Accepted Answer

A) True 
 B)False

Question 5

In general, with regard to dividend payments, the contractual constraints imposed by loan agreements can include all of the following EXCEPT

Accepted Answer

A)  limiting the percentage of earnings that can be paid out in dividends. 
B)  requiring the payment of a common stock dividend. 
C)  prohibiting the payment of cash dividends until a certain level of earnings has been achieved. 
D)  limiting the actual dollar amount of dividends that can be paid out. 
A)  limiting the percentage of earnings that can be paid out in dividends. 
B)  requiring the payment of a common stock dividend. 
C)  prohibiting the payment of cash dividends until a certain level of earnings has been achieved. 
D)  limiting the actual dollar amount of dividends that can be paid out.

Question 6

In a 1 for 4 stock split, a share trading at $10 prior to the split would be trading at_________after the split.

Accepted Answer

A)  $2 
B)  $2.50 
C)  $40 
D)  $10 
A)  $2 
B)  $2.50 
C)  $40 
D)  $10

Question 7

All of the following are reasons companies repurchase shares, EXCEPT

Accepted Answer

A)  to preserve cash for investment in growth opportunities. 
B)  to reduce the number of common shares outstanding. 
C)  to adjust the debt ratio to achieve an optimal capital structure. 
D)  to send a positive signal to the market. 
A)  to preserve cash for investment in growth opportunities. 
B)  to reduce the number of common shares outstanding. 
C)  to adjust the debt ratio to achieve an optimal capital structure. 
D)  to send a positive signal to the market.

Question 8

Firms with many investments opportunities would likely have

Accepted Answer

A)  a low payout ratio. 
B)  a low retention ratio. 
C)  a high payout ratio. 
D)  none of the above. 
A)  a low payout ratio. 
B)  a low retention ratio. 
C)  a high payout ratio. 
D)  none of the above.

Question 9

The shareholder receiving a stock dividend receives

Accepted Answer

A)  cash. 
B)  additional shares of common stock and cash. 
C)  a share of common stock of equal value to their existing shares of common stock. 
D)  nothing of value. 
A)  cash. 
B)  additional shares of common stock and cash. 
C)  a share of common stock of equal value to their existing shares of common stock. 
D)  nothing of value.

Question 10

If a firm pays out a higher percentage of earnings, new equity capital will have to be raised with common stock, which will result in higher control and earnings for the existing owners.

Accepted Answer

A) True 
 B)False

Question 11

Stockholders dislike dividends that

Accepted Answer

A)  increase. 
B)  are continuous. 
C)  fluctuate with earnings. 
D)  are fixed. 
A)  increase. 
B)  are continuous. 
C)  fluctuate with earnings. 
D)  are fixed.

Question 12

The ex-dividend period begins four business days prior to the payment date during which a stock will be sold without paying the current dividend.

Accepted Answer

A) True 
 B)False

Question 13

At a firm's quarterly dividend meeting held April 9, the directors declared a $.50 per share cashdividend for the holders of record on Monday, May 1. The firm's stock will sell ex-dividends on

Accepted Answer

A)  April 25. 
B)  April 27. 
C)  April 9. 
D)  May 5. 
A)  April 25. 
B)  April 27. 
C)  April 9. 
D)  May 5.

Question 14

Dividends paid by a Canadian corporation to a Canadian corporation are

Accepted Answer

A)  taxed as ordinary income. 
B)  tax-exempt. 
C)  taxed at 50% of the firm's marginal tax rate. 
D)  given a dividend tax credit. 
A)  taxed as ordinary income. 
B)  tax-exempt. 
C)  taxed at 50% of the firm's marginal tax rate. 
D)  given a dividend tax credit.

Among owner considerations in the establishment of dividend policy, any of the following may enter into the decision EXCEPT

A firm that has a large percentage of _________investors may pay out a lower percentage of its earnings as dividends.

In the dividend relevance arguments, current dividend payments are believed to reduce investor's uncertainty, thereby-all else being equal-placing a higher value on the firm's stock.

Holders of record are stockholders whose names are recorded on the date of record.

In general, with regard to dividend payments, the contractual constraints imposed by loan agreements can include all of the following EXCEPT

In a 1 for 4 stock split, a share trading at $10 prior to the split would be trading at_________after the split.

All of the following are reasons companies repurchase shares, EXCEPT

Firms with many investments opportunities would likely have

The shareholder receiving a stock dividend receives

If a firm pays out a higher percentage of earnings, new equity capital will have to be raised with common stock, which will result in higher control and earnings for the existing owners.

Stockholders dislike dividends that

The ex-dividend period begins four business days prior to the payment date during which a stock will be sold without paying the current dividend.

At a firm's quarterly dividend meeting held April 9, the directors declared a $.50 per share cashdividend for the holders of record on Monday, May 1. The firm's stock will sell ex-dividends on

Dividends paid by a Canadian corporation to a Canadian corporation are

Overview of Corporate Finance

Financial Statements, Cash Flows, and Taxes

Financial Statement Analysis

Financial Planning and Forecasting

Financial Markets, Institutions, and Securities

Time Value of Money

Risk and Return

Valuation of Financial Securities

The Cost of Capital

Leverage and Capital Structure

Capital Budgeting: Principles and Techniques

Dealing With Project Risk and Other Topics in Capital Budgeting

Working Capital and Management of Current Assets

Management of Current Liabilities

Lease Financing: Concepts and Techniques

Corporate Securities, Derivatives, and Swaps

Mergers and Acquisitions, and Business Failure

International Corporate Finance

Filters

Exam 11: Dividend Policy

Among owner considerations in the establishment of dividend policy, any of the following may enter into the decision EXCEPT

A firm that has a large percentage of _________investors may pay out a lower percentage of its earnings as dividends.

In the dividend relevance arguments, current dividend payments are believed to reduce investor's uncertainty, thereby-all else being equal-placing a higher value on the firm's stock.

Holders of record are stockholders whose names are recorded on the date of record.

In general, with regard to dividend payments, the contractual constraints imposed by loan agreements can include all of the following EXCEPT

In a 1 for 4 stock split, a share trading at $10 prior to the split would be trading at_________after the split.

All of the following are reasons companies repurchase shares, EXCEPT

Firms with many investments opportunities would likely have

The shareholder receiving a stock dividend receives

If a firm pays out a higher percentage of earnings, new equity capital will have to be raised with common stock, which will result in higher control and earnings for the existing owners.

Stockholders dislike dividends that

The ex-dividend period begins four business days prior to the payment date during which a stock will be sold without paying the current dividend.

At a firm's quarterly dividend meeting held April 9, the directors declared a $.50 per share cashdividend for the holders of record on Monday, May 1. The firm's stock will sell ex-dividends on

Dividends paid by a Canadian corporation to a Canadian corporation are

Overview of Corporate Finance

Financial Statements, Cash Flows, and Taxes

Financial Statement Analysis

Financial Planning and Forecasting

Financial Markets, Institutions, and Securities

Time Value of Money

Risk and Return

Valuation of Financial Securities

The Cost of Capital

Leverage and Capital Structure

Capital Budgeting: Principles and Techniques

Dealing With Project Risk and Other Topics in Capital Budgeting

Working Capital and Management of Current Assets

Management of Current Liabilities

Lease Financing: Concepts and Techniques

Corporate Securities, Derivatives, and Swaps

Mergers and Acquisitions, and Business Failure

International Corporate Finance

Filters