Exam 13: Dividend Policy and Internal Financing

Plantain,Inc.declared a dividend of $1 per share on March 1.The ex-dividend date is March 15^th,and the payment date is April 1^st.The most likely record date is

The final approval of a dividend payment comes from

A corporation has been paying out $1 million per year in dividends for the past several years.This year,the company wants to pay the $1 million dividend,but can't.All of the following are reasons the company cannot continue its dividend payment policy EXCEPT

Assume that a firm has a steady record of paying stable dividends for years.Market analysts had expected management to increase the dividend by 7.5% in the latest quarter.However,management announced a 15% increase in the current year's dividend.The market value of the stock rose 20% on the day of the announcement.Which of the following would best explain the stock market's reaction to the announcement?

An increase in flotation costs will most likely result in which of the following?

The difference between the capital gains tax rate and the income tax rate is an incentive for

Dew Drop In,Inc.announces is quarterly dividend will increase from $3.80 to $4.00.After the announcement,the price of Dew Drop In,Inc.'s stock drops.The most likely explanation is that

The residual dividend theory is based on the observation that flotation costs make the cost of new common stock significantly higher than the cost of retained earnings.

The correct order of dividend process dates is

The residual dividend theory suggests that dividends will only be paid

LaMike owns 1,000 shares of DAS.Inc.'s common stock.The stock has a par value of $1 per share and is currently selling for $80 per share.DAS declares a 20% stock dividend.In a perfect capital market,after the dividend Sam will have

A justification for no dividend payments that would be pleasing to shareholders could be

Dividends per share divided by earnings per share equal the dividend payout ratio.

What is the economic difference between a stock dividend and a stock split?

How frequently do corporations generally pay dividends?

From the shareholders' perspective,a stock repurchase has a potential tax advantage over the payment of a cash dividend.

QRW,Inc.has a retained earnings balance of $2,000,000.The company reported net income of $600,000,sales of $4,000,000,and has 200,000 shares of common stock outstanding.The company announced a dividend of $2.00 per share.Therefore the company's dividend payout ratio is

Which of the following is (are)false?

Analysis of dividend policy begins with the basic assumption that shareholder wealth maximization is the primary goal,and therefore dividends should be of primary concern even if their payment results in capital rationing.

Dryden,Corp.has 500,000 shares of common stock outstanding,a P/E ratio of 11,and $900,000 earnings available for common stockholders.The board of directors has just voted a 5:2 stock split. a.If you had 100 shares of stock before the split,how many shares will you have after the split? b.What was the total value of your investment in Dryden stock before the split? c.What should be the total value of your investment in Dryden stock after the split? d.In view of your answers to (b)and (c)above,why would a firm's management want to have a stock split?