Deck 17: Dividends and Payout Policypart Seven: Short-Term Financial Planning and Management

Question 1

The ex-dividend date is defined as _____ business day(s)before the date of record.

A) 1
B) 2
C) 3
D) 5
E) 10

Answer 1

2

Question 2

Which one of the following statements related to cash dividends is correct?

A) Extra cash dividends cannot be repeated in the future.
B) A dividend is never a liability until it has been declared.
C) If a firm has paid regular quarterly dividends for at least five consecutive years it is legally obligated to continue doing so.
D) Regular cash dividends reduce paid-in capital.
E) The dividend yield expresses the annual dividend as a percentage of net income.

Answer 2

A dividend is never a liability until it has been declared.

Question 3

Which one of the following dates is used to determine the names of shareholders who will receive a dividend payment?

A) ex-rights date
B) ex-dividend date
C) date of record
D) date of payment
E) declaration date

Answer 3

date of record

Question 4

Which one of the following does not affect the total equity of a firm but does increase the number of shares outstanding?

A) special dividend
B) stock split
C) share repurchase
D) rights offer
E) liquidating dividend

Question 5

What is the information content effect?

A) any type of new information that causes a firm to cease paying dividends
B) any news announcement that was anticipated and thus produces no reaction from investors
C) the primary contributing data that helps directors determine the amount of a particular dividend payment
D) any type of reaction from a shareholder in response to a news announcement related to the stock issuer
E) the financial market's reaction to a change in the amount of a firm's dividend

Question 6

The common stock of Pierson Enterprises has historically had a high dividend yield and is expected to continue to do so.As a result,the majority of its shareholders are individuals and entities that are seeking a regular source of cash income.Most of these shareholders pay either no taxes or a relatively low amount of taxes.The fact that most of these shareholders have similar characteristics is referred to by which one of the following terms?

A) information content effect
B) clientele effect
C) efficient markets hypothesis
D) distribution effect
E) market reaction effect

Question 7

The board of directors of Wilson Sporting Equipment met this afternoon and passed a resolution to pay a cash dividend of $0.42 a share next month.In relation to this dividend,today is referred to as which one of the following dates?

A) decision date
B) date-of-record
C) declaration date
D) payment date
E) ex-dividend date

Question 8

Bell Weather Markets has recently sold for as little as $8 a share and as much as $15 a share.The difference between these two prices is referred to as the:

A) price variance.
B) bid-ask spread.
C) trading range.
D) opening price.
E) closing price.

Question 9

The last date on which you can purchase shares of stock and still receive the dividend is the date which is _____ business days prior to the date of record.

A) 1
B) 2
C) 3
D) 4
E) 5

Question 10

Green Roof Motels has more cash on hand than its operations require.Thus,the firm has decided to pay out some of its earnings in the form of cash to its shareholders.What are these payments to shareholders called?

A) dividends
B) stock payments
C) repurchases
D) payments-in-kind
E) stock splits

Question 11

Billingsley United declared a $0.20 a share dividend on Thursday,October 16.The dividend will be paid on Monday,November 10 to shareholders of record on Friday,October 31.Which one of the following is the ex-dividend date?

A) Tuesday,October 28
B) Wednesday,October 29
C) Thursday,October 30
D) Wednesday,November 5
E) Thursday,November 6

Question 12

Lester's Frozen Foods just paid out $0.50 a share to its shareholders.The cash for these payments came from a large sale of assets,not from any earnings of the firm.What are these payments to shareholders called?

A) dividends
B) distributions
C) repurchases
D) payments-in-kind
E) stock splits

Question 13

Dividend payments are mailed on which one of the following dates?

A) ex-rights date
B) ex-dividend date
C) date of record
D) date of payment
E) declaration date

Question 14

A $0.60 quarterly cash payment paid by T.L.Jones & Co.to its shareholders in the normal course of business is called a:

A) repurchase.
B) liquidating dividend.
C) regular cash dividend.
D) special dividend.
E) extra cash dividend.

Question 15

A reverse stock split is defined as:

A) an increase in the number of shares outstanding that does not affect owners' equity.
B) a firm buying back existing shares of its stock on the open market.
C) a firm selling new shares of stock on the open market.
D) a decrease in the number of shares outstanding that does not affect owners' equity.
E) a decrease in both the number of shares outstanding and the price per share.

Question 16

Which one of the following involves a payment in shares by a stock issuer that increases the number of shares a shareholder owns but also decreases the value per share?

A) cash dividend
B) stock dividend
C) stock repurchase
D) stock split
E) reverse stock split

Question 17

Taylor's Tools declared a $0.48 per share dividend on Friday,March 7.The dividend will be paid on Monday,April 7.The ex-dividend date is Tuesday,March 18.What is the record date?

A) Friday,March 14
B) Monday,March 17
C) Wednesday,March 19
D) Thursday,March 20
E) Friday,March 21

Question 18

Which one of the following refers to the ability of shareholders to undo a firm's dividend policy and create an alternative dividend policy by reinvesting dividends or selling shares of stock?

A) perfect foresight model
B) personalization
C) recapitalization
D) offsetting leverage
E) homemade dividend policy

Question 19

Kate purchased 500 shares of Fast Deliveries stock on Wednesday,July 7^th.Ted purchased 100 shares of Fast Deliveries stock on Thursday,July 8^th.Fast Deliveries declared a dividend on June 20^th to shareholders of record on July 12^th and payable on August 1^st.Which one of the following statements concerning the dividend paid on August 1^st is correct given this information?

A) Neither Kate nor Ted is entitled to the dividend.
B) Kate is entitled to the dividend but Ted is not.
C) Ted is entitled to the dividend but Kate is not.
D) Both Ted and Kate are entitled to the dividend.
E) Both Ted and Kate are entitled to one-half of the dividend amount.

Question 20

HJ Corporation has excess cash and has opted to buy some of its shares of outstanding common stock.What is this process of buying called?

A) stock dividend
B) stock split
C) stock repurchase
D) stock recap
E) stock repeal

Question 21

Which one of the following statements related to stock repurchases is correct?

A) An open market stock repurchase increases the total wealth of a shareholder if you ignore taxes,costs,and market imperfections.
B) Targeted repurchases must be offered to all shareholders but can be done in steps such that only a portion of the shareholders have the option to sell at any one point in time.
C) When a firm wishes to repurchase shares in the open market,it will do so in a special trading session that is set up by the SEC.
D) A firm may spend more cash over the course of a year on stock repurchases than it does on cash dividends.
E) Tender offer prices must be set equal to the opening market price on the day the tender offer is announced.

Question 22

Which one of the following is a result of a stock repurchase?

A) increase in the number of shares outstanding
B) increase in the market price per share
C) increase in the total equity of the repurchasing firm
D) decrease in EPS
E) PE ratio equal to that resulting from a comparable cash dividend

Question 23

A stock repurchase program:

A) requires all shareholders to sell a fraction of their shares.
B) is preferred over a high-dividend program only by tax-exempt shareholders.
C) decreases both the number of shares outstanding and the market price per share.
D) has no effect on a firm's financial statements.
E) is essentially the same as a cash dividend program provided there are no taxes or other costs.

Question 24

Which one of the following favors a low dividend policy?

A) the tax on capital gains is deferred until the gain is realized
B) few,if any,positive net present value projects are available to a firm
C) a majority of the shareholders has a low relevant tax rate
D) a majority of the shareholders has better investment opportunities with similar risks
E) corporate tax rates exceed personal tax rates

Question 25

Which one of the following statements appears to be supported by the current dividend policies of U.S.industrial firms?

A) Firms tend to increase the dividend amount per share,even when it's unclear if the increase can be maintained.
B) Investors no longer react to changes,either up or down,in dividends.
C) Newer,high-growth firms tend to pay larger dividends than mature firms.
D) Dividends are still viewed by shareholders as a signal of a firm's future outlook.
E) Managers are no longer hesitant to lower dividend payments.

Question 26

Which one of the following statements correctly applies to U.S.industrial firms based on the period of 1984-2004?

A) Earnings growth rates tend to lag dividend growth rates.
B) Dividends tend to fluctuate significantly from quarter to quarter.
C) The percentage of these firms paying dividends in 2004 was higher than in 1984.
D) The total amount of dividends paid by these firms was greater in 2004 than in 1984.
E) Non-dividend paying firms in 1984 were more apt to commence paying regular dividends than to implement a stock repurchase program.

Question 27

Which one of the following statements related to dividend policy is correct?

A) The primary question related to dividend policy is whether or not a firm should ever pay a dividend.
B) Both dividends and dividend policy are irrelevant.
C) Dividend policy focuses on the timing of dividend payments.
D) Homemade dividends increase the importance of a firm's dividend policy decisions.
E) Whether or not a firm ever pays a dividend is irrelevant to equity valuation.

Question 28

Which one of the following statements is correct?

A) Firms prefer to cut dividend payments rather than borrow money to fund a short-term cash need.
B) Share repurchases tend to increase agency costs.
C) Maintaining a steady dividend is a key goal of most dividend-paying firms.
D) Tax rates are the key factor in determining a firm's dividend policy.
E) Stock prices tend to ignore expected changes in dividend payments.

Question 29

An investor is more likely to prefer a high dividend payout if a firm:

A) has high flotation costs.
B) has few,if any,positive net present value projects.
C) has lower tax rates than the investor.
D) has a stock price that is increasing rapidly.
E) offers substantial gains on its equities,which are taxed at a favorable rate.

Question 30

S.L.Moffatt,Inc.has paid a quarterly dividend of $1.20 per share for the last ten quarters.Which one of the following is most apt to cause the firm to reduce the amount of its next dividend payment?

A) decrease in the next quarter's revenue
B) decrease in the next quarter's net income
C) loss of a major customer which lowers the firm's outlook for the next few years
D) major lump sum cash outflow next month to settle a class action product liability lawsuit on a product that is no longer produced
E) decrease in the number of new projects under consideration as compared to last year

Question 31

Which one of the following statements related to stock repurchases is correct?

A) U.S.industrial firms have increased their stock repurchases every year for each of the past twenty years.
B) A stock repurchase can be used as a means for incumbent officers to retain control of a firm.
C) A tender offer indicates that a firm is willing and able to purchase how ever many shares the current shareholders wish to sell.
D) All stock repurchases must be identified as such to the selling party.
E) Stock repurchases can be a relatively tax-efficient method of distributing cash to shareholders.

Question 32

The information content of a dividend increase generally signals that:

A) the firm has a one-time surplus of cash.
B) the firm has few,if any,net present value projects to pursue.
C) management believes earnings growth will be strong going forward.
D) the firm has more cash than it needs due to a decline in future orders.
E) dividends thereafter will be lower.

Question 33

If you ignore taxes and costs,a stock repurchase will:
I.reduce the total assets of a firm.
II.decrease the earnings per share.
III.reduce the PE ratio more so than an equivalent stock dividend.
IV.reduce the total equity of a firm.

A) I and III only
B) I and IV only
C) II and IV only
D) I,III,and IV only
E) II,III,and IV only

Question 34

Which of the following tends to increase the ability of a shareholder to create his or her own homemade dividend policy?
I.low taxes on capital gains
II.dividend reinvestment plans
III.large holdings of shares
IV.low cost equity purchases

A) II only
B) II and III only
C) I,II,and III only
D) II,III,and IV only
E) I,II,III,and IV

Question 35

All else equal,the market value of a stock will tend to decrease by roughly the aftertax value of the dividend on the:

A) dividend declaration date.
B) ex-dividend date.
C) date of record.
D) date of payment.
E) day after the date of payment.

Question 36

The dividend market is in equilibrium when:

A) all firms adopt a low dividend policy.
B) half of the firms adopt a low dividend policy and half adopt a high dividend policy.
C) all clienteles are satisfied.
D) dividends remain constant and no special dividends are declared.
E) the total amount of the annual dividends is equal to the net income for the year.

Question 37

Automatic dividend reinvestment plans:
I.require that stockholders reinvest all of the dividends to which they are entitled.
II.sometimes grant shareholders the privilege of purchasing additional shares at a discounted price.
III.help shareholders create their own homemade dividend policies.
IV.help make corporate dividend policies irrelevant to individual stockholders.

A) II only
B) III only
C) II and III only
D) II,III,and IV only
E) I,II,III,and IV

Question 38

Which of the following shareholders tend to favor a high dividend policy?
I.retired individuals
II.endowment funds
III.corporate investors
IV.investors with high dividend tax rates but low capital gains tax rates

A) I and III only
B) II and IV only
C) I,II,and III only
D) II,III,and IV only
E) I,II,III,and IV

Question 39

Steve owns 3,000 shares of NOP,Inc.stock,which he purchased six years ago at a price of $22 a share.Today,these shares are selling for $68 each.Assume the current tax laws are such that Steve is subject to a tax rate of 25 percent on both his dividend income and his capital gains.From Steve's point of view,a stock repurchase today: (Ignore costs)

A) is equivalent to a cash dividend in all respects.
B) is more desirable than a cash dividend in respect to taxes.
C) will result in the same tax liability as an equivalent cash dividend.
D) is more highly taxed than a cash dividend.
E) is totally unacceptable to him.

Question 40

Which of the following tend to keep dividends low?
I.shareholders desiring current income
II.terms contained in bond indenture agreements
III.the desire to maintain constant dividends over time
IV.flotation costs

A) II and III only
B) I and IV only
C) II,III,and IV only
D) I,II,and III only
E) I,II,III,and IV

Question 41

Steve purchased 300 shares of Alpha Beta stock on May 9.On May 15,he purchased another 300 shares and then on May 22 he purchased a final 400 shares of Alpha Beta stock.The company declared a dividend of $1.60 a share on April 30 to holders of record on Friday,May 23.The dividend is payable on June 2.How much dividend income will Steve receive on June 2 from Alpha Beta?

A) $0
B) $480
C) $960
D) $1,200
E) $1,600

Question 42

Revol-Tech is a technology firm with excellent growth prospects.The firm wishes to do something to acknowledge the loyalty of the shareholders but needs all of its available cash to fund the firm's rapid growth.The market price of the stock is currently trading at the upper end of its preferred trading range.The firm is most apt to consider which one of the following in this situation?

A) liquidating dividend
B) stock split
C) reverse stock split
D) small stock dividend
E) special cash dividend

Question 43

Plyler Cabinets declared a dividend of $1.20 a share on May 15 to holders of record on Monday,June 1.The dividend is payable on June 15.Sara purchased 500 shares of Plyler Cabinets stock on Friday,May 29.How much dividend income will she receive on June 15 from Plyler Cabinets?

A) $0
B) $0.80
C) $1.60
D) $160.00
E) $320.00

Question 44

A one-for-four reverse stock split will:

A) increase the par value by 25 percent.
B) increase the number of shares outstanding by 400 percent.
C) increase the market value but not affect the par value per share.
D) increase a $1 par value to $4.
E) increase a $1 par value to $5.

Question 45

A small stock dividend is defined as a stock dividend of less than _____ percent.

A) 10 to 15
B) 15 to 20
C) 20 to 25
D) 25 to 30
E) 30 to 35

Question 46

Which two of the following are the best justifications for a reverse stock split?
I.combine a reverse stock split with a stock repurchase to enable a firm to go dark
II.increase the respectability of the stock
III.avoid delisting
IV.reduce transaction costs for shareholders

A) I and II only
B) I and III only
C) II and III only
D) II and IV only
E) III and IV only

Question 47

Jenningston Mills has a market value equal to its book value.Currently,the firm has excess cash of $1,200,other assets of $5,800,and equity valued at $3,750.The firm has 250 shares of stock outstanding and net income of $420.What will the new earnings per share be if the firm uses 25 percent of its excess cash to complete a stock repurchase?

A) $1.83
B) $1.89
C) $1.96
D) $2.00
E) $2.08

Question 48

Which one of the following is a result of a small stock dividend?

A) increase in retained earnings
B) decrease in total owner's equity
C) decrease in cash
D) decrease in capital in excess of par value
E) increase in common stock

Question 49

Which one of the following is a direct result of a 2-for-1 stock split?

A) a 100 percent increase in the number of shareholders
B) a 100 percent increase in the common stock account balance
C) a 100 percent decrease in the stock price
D) a 50 percent increase in the number of shares outstanding
E) a 50 percent decrease in the par value per share

Question 50

A stock split:

A) increases the total value of the common stock account.
B) decreases the value of the retained earnings account.
C) increases the par value per share.
D) increases the value of the capital in excess of par account.
E) decreases the market value per share.

Question 51

Stock splits can be used to:

A) adjust the market price of a stock such that it falls within a preferred trading range.
B) decrease the excess cash held by a firm thereby lowering agency costs.
C) increase both the number of shares outstanding and the market price per share.
D) increase the total equity of a firm.
E) adjust the debt-equity ratio.

Question 52

A firm wants to maintain a minimum stock price of $15 a share.Due to a recent market downturn,the stock is currently selling for $6 a share.The firm should consider a:

A) 3-for-1 stock split.
B) 4-for-1 stock split.
C) 1-for-3 reverse stock split.
D) 1-for-4 reverse stock split.
E) 1-for-5 reverse stock split.

Question 53

You own 2,200 shares of Deltona Hardware.The company has stated that it plans on issuing a dividend of $0.42 a share at the end of this year and then issuing a final liquidating dividend of $2.90 a share at the end of next year.Your required rate of return on this security is 16 percent.Ignoring taxes,what is the value of one share of this stock to you today?

A) $2.30
B) $2.43
C) $2.52
D) $2.92
E) $3.32

Question 54

Which of the following account balance changes occur as a result of a large stock dividend?
I.increase in common stock
II.decrease in capital in excess of par
III.increase in capital in excess of par
IV.decrease in retained earnings

A) I and III only
B) II and IV only
C) I and IV only
D) II and III only
E) I,III,and IV only

Question 55

Al owns 800 shares of The Good Life Co.The company recently issued a statement that it will pay a dividend per share of $0.55 this year and a $0.60 per share dividend next year.Al does not want any dividend income this year but does want as much dividend income as possible next year.Al earns 9 percent on his investments.Ignoring taxes,what will Al's total homemade dividend be next year?

A) $910.20
B) $920.00
C) $930.50
D) $941.80
E) $959.60

Question 56

Sligo Minerals stock is currently trading at $6 a share.The firm believes its primary clientele can afford to spend between $1,500 and $2,000 to purchase a round lot of 100 shares.The firm should consider a:

A) reverse stock split.
B) liquidating dividend.
C) stock dividend.
D) stock split.
E) special dividend.

Question 57

Webster United is paying a $1.10 per share dividend today.There are 350,000 shares outstanding with a market price of $25 per share.Ignore taxes.Before the dividend,the company had earnings per share of $1.74.As a result of this dividend,the:

A) retained earnings will decrease by $350,000.
B) retained earnings will increase by $385,000.
C) total firm value will not change.
D) earnings per share will increase to $2.84.
E) price-earnings ratio will be 13.74.

Question 58

Blasco's has a market value equal to its book value.Currently,the firm has excess cash of $1,332,other assets of $11,674,and equity of $7,200.The firm has 1,200 shares of stock outstanding and net income of $838.Blasco's has decided to spend one-third of its excess cash on a share repurchase program.How many shares of stock will be outstanding after the stock repurchase is completed?

A) 937 shares
B) 1,050 shares
C) 1,126 shares
D) 1,578 shares
E) 1,584 shares

Question 59

On July 7,you purchased 500 shares of Wagoneer,Inc.stock for $21 a share.On August 1,you sold 200 shares of this stock for $28 a share.You sold an additional 100 shares on August 17 at a price of $25 a share.The company declared a $0.95 per share dividend on August 4 to holders of record as of Wednesday,August 15.This dividend is payable on September 1.How much dividend income will you receive on September 1 as a result of your ownership of Wagoneer stock?

A) $0
B) $190
C) $285
D) $360
E) $475

Question 60

Which of the following balance sheet accounts are affected by a small stock dividend?
I.cash
II.common stock
III.retained earnings
IV.capital in excess of par value

A) I and III only
B) II and III only
C) II and IV only
D) II,III,and IV only
E) I,II,III,and IV

Question 61

Mario's has 18,000 shares of stock outstanding with a par value of $1 per share and a market price of $4 a share.The balance sheet shows $18,000 in the common stock account,$368,000 in the paid in surplus account,and $64,000 in the retained earnings account.The firm just announced a 5-for-1 stock split.What will the paid in surplus account value be after the split?

A) $336,000
B) $368,000
C) $426,000
D) $548,000
E) $606,000

Question 62

Alfonzo's Italian House has 25,000 shares of stock outstanding with a par value of $1 per share and a market price of $28 a share.The firm just announced a 5-for-3 stock split.What will the market price per share be after the split?

A) $16.80
B) $21.60
C) $28.00
D) $46.67
E) $56.00

Question 63

Della's Pool Halls has 12,000 shares of stock outstanding with a par value of $1 per share and a market price of $39 a share.The firm just announced a 4-for-3 stock split.How many shares of stock will be outstanding after the split?

A) 9,000 shares
B) 10,000 shares
C) 12,000 shares
D) 14,600 shares
E) 16,000 shares

Question 64

Kurt's Market has 8,000 shares of stock outstanding with a par value of $1 per share and a market value of $13 per share.The balance sheet shows $8,000 in the common stock account,$26,000 in the capital in excess of par account,and $36,800 in the retained earnings account.The firm just announced a 100 percent stock dividend.What will be the balance in the retained earnings account after this dividend?

A) $28,800
B) $36,800
C) $38,700
D) $40,700
E) $128,700

Question 65

Southern Fried Chicken has 8,000 shares of stock outstanding with a par value of $1 per share and a market value of $34 per share.The balance sheet shows $45,000 in the capital in excess of par account,$8,000 in the common stock account,and $152,000 in the retained earnings account.The firm just announced a 5 percent stock dividend.What will total owners' equity be after the dividend?

A) $185,800
B) $199,000
C) $205,000
D) $206,800
E) $212,200

Question 66

Cooper Brands,Inc. ,has 68,000 shares of stock outstanding at a market price of $63 a share.The par value is $1 per share.The company has just announced a 5-for-4 stock split.What will the market price per share be after the split?

A) $50.40
B) $58.20
C) $62.50
D) $78.75
E) $82.50

Question 67

The Peanut Shack has 6,5000 shares of stock outstanding with a par value of $1 per share.The current market value of the firm is $145,600.The company just announced a 3-for-2 stock split.What will the market price per share be after the split?

A) $12.14
B) $14.93
C) $16.18
D) $28.20
E) $36.40

Question 68

The Tanning Bed has 10,000 shares of stock outstanding with a par value of $1 per share and a market value of $8 per share.The balance sheet shows $10,000 in the common stock account,$60,000 in the capital in excess of par account,and $94,300 in the retained earnings account.The firm just announced a 100 percent stock dividend.What will be the value of the common stock account after the dividend?

A) $5,000
B) $10,000
C) $11,000
D) $15,000
E) $20,000

Question 69

South Shore Limited has 21,000 shares of stock outstanding with a par value of $1 per share and a market price of $7.50 a share.The firm just announced a 5-for-2 stock split.What will the par value of the stock be after the split?

A) $0.40
B) $0.80
C) $1.00
D) $1.40
E) $1.60

Question 70

Tucker's National Distributing has a current market value of equity of $10,665.Currently,the firm has excess cash of $640,total assets of $22,400,net income of $3,210,and 500 shares of stock outstanding.Tucker's is going to use all of its excess cash to repurchase shares of stock.What will the stock price per share be after the stock repurchase is completed?

A) $20.87
B) $20.94
C) $21.06
D) $21.33
E) $21.42

Question 71

Randall's,Inc.has 20,000 shares of stock outstanding with a par value of $1.00 per share.The market value is $12 per share.The balance sheet shows $42,000 in the capital in excess of par account,$20,000 in the common stock account,and $50,500 in the retained earnings account.The firm just announced a 5 percent (small)stock dividend.What will the balance in the retained earnings account be after the dividend?

A) $38,500
B) $39,500
C) $50,500
D) $61,500
E) $62,500

Question 72

Western Mountain Water has 11,000 shares of stock outstanding with a par value of $1 per share.The current market value of the firm is $135,000.The balance sheet shows a capital in excess of par value account balance of $68,000 and retained earnings of $49,000.The company just announced a 2-for-1 stock split.What will the capital in excess of par value account balance be after the split?

A) $45,333
B) $54,667
C) $68,000
D) $86,667
E) $102,000

Question 73

The Peace River Corporation has 62,000 shares of stock outstanding at a market price of $48 a share.The company has just announced a 3-for-2 stock split.How many shares of stock will be outstanding after the split?

A) 41,333 shares
B) 54,333 shares
C) 89,333 shares
D) 93,000 shares
E) 100,500 shares

Question 74

Delaware Trust has 450 shares of common stock outstanding at a market price per share of $27.Currently,the firm has excess cash of $400,total assets of $28,900,and net income of $1,320.The firm has decided to pay out all of its excess cash as a cash dividend.What will the earnings per share be after this dividend is paid?

A) $2.69
B) $2.86
C) $2.93
D) $3.07
E) $3.24

Question 75

Josh's,Inc.has 7,000 shares of stock outstanding with a par value of $1.00 per share and a market value of $32 a share.The balance sheet shows $82,000 in the capital in excess of par account,$7,000 in the common stock account,and $64,800 in the retained earnings account.The firm just announced a 10 percent stock dividend.What is the value of the capital in excess of par account after the dividend?

A) $76,000
B) $82,000
C) $97,700
D) $103,700
E) $104,400

Question 76

The equity of Blooming Roses has a total market value of $16,000.Currently,the firm has excess cash of $1,400 and net income of $15,400.There are 750 shares of stock outstanding.What will be the percentage change in the stock price per share if the firm pays out all of its excess cash as a cash dividend?

A) -9.40 percent
B) -8.75 percent
C) -7.50 percent
D) -2.75 percent
E) 0.00 percent

Question 77

Val's Marina Supply has 3,500 shares of stock outstanding with a par value of $1.00 per share and a market value of $19 per share.The balance sheet shows $3,500 in the common stock account,$24,000 in the capital in excess of par account,and $31,400 in the retained earnings account.The firm just announced a 100 percent stock dividend.What is the value of the capital in excess of par account after the dividend?

A) $0
B) $20,500
C) $24,000
D) $55,500
E) $87,000

Question 78

The Mining Co.has 20,000 shares of stock outstanding.The current market value of the firm is $328,000.The company has retained earnings of $27,000,capital in excess of par value of $160,000,and a common stock account value of $40,000.The company is planning a 2-for-5 reverse stock split.What will the par value per share be after the split?

A) $0.15
B) $0.20
C) $1.00
D) $2.50
E) $5.00

Question 79

Prezario's has 25,000 shares of stock outstanding with a par value of $1 per share.The current market value of the firm is $847,000.Currently,the retained earnings account balance is $428,000 and the capital in excess of par value account balance is $187,000.The company just announced a 3-for-1 stock split.What is the common stock account balance after the stock split?

A) $8,333
B) $25,000
C) $75,000
D) $77,333
E) $232,000

Question 80

Verbal Communications,Inc. ,has 14,000 shares of stock outstanding with a par value of $1 per share and a market value of $32 per share.The firm just announced a 100 percent stock dividend.What is the market value per share after the dividend?

A) $16.00
B) $23.00
C) $32.00
D) $46.00
E) $64.00