Exam 14: Dividends and Dividend Policy

Fresh Baked Goods has 36,800 shares of stock outstanding at a market price of $24.91per share.What will be the price per share after a stock dividend of 6 percent? Ignore taxes and market imperfections.

Which one of the following is least apt to limit the amount of cash dividends a firm can pay?

Kelso's is considering spending $80,000 on either a stock repurchase or an extra cash dividend.Which one of the following values will be the same whether the firm pays a dividend or repurchases stock? Assume there are no taxes or market imperfections.

The argument that dividend policy is irrelevant tends to be supported by which one of these factors?

Most company managers overwhelming feel that:

AIW, Inc.currently has 275,000 shares of stock outstanding that sell for $87 per share.Assuming no market imperfections or tax effects exist, what will be the share price after AIW implements a 7-for-3 stock split?

Dragon Trucking just paid its annual regular cash dividend of $1.08 a share, along with a special dividend of $.12 a share.The company follows a policy of increasing its dividend by 1 percent annually.Which one of the following is the best estimate of the firm's next annual dividend payment?

Which statement is correct regarding US companies?

On which one of the following dates are dividend checks mailed?

Jessica currently owns 500 shares of Alpha stock valued at $19 share.What will her investment in Alpha be worth if the company declares a 4-for-3 stock split?

Cosmetics Emporium is preparing to pay its quarterly dividend of $1.76 a share.The stock closed at $79.65 a share today and goes ex-dividend tomorrow.What will the ex-dividend stock price be if the relevant tax rate is 21 percent and all else is held constant?

KL Electronics has paid a quarterly dividend of $.42 per share for the past two years.This quarter, the firm plans to pay $.42 plus an additional $.05 per share.The firm has stated that it is uncertain whether it will pay $.42 or $.47 per share next quarter.Which one of the following is the best description of the additional $.05 that is being paid this quarter?

The Press has total assets of $848,000 and total debt of $402,000 on a market value basis.There are 25,000 shares of stock outstanding.The company has announced it is going to repurchase $40,000 worth of stock in the open market.What will be the price per share after the repurchase?

A market value balance sheet shows cash of $91,000; fixed assets of $327,000, and equity of $418,000.There are 16,000 shares of stock outstanding.The company has declared a dividend of $.82 per share.The stock goes ex-dividend tomorrow.Ignore any tax effects.What will be the firm's market equity value after the dividend is paid?

The common stock of Beasley International goes ex-dividend tomorrow.The stock closed at a price of $28.06 a share today.This quarter, the company is paying a cash dividend of $.17 a share and a liquidating dividend of $.23 a share.Assuming the tax rate on dividends is 20 percent, what will be the ex-dividend price tomorrow morning?

Heidi owns 400 shares of Boyd Enterprises stock, which is valued at $13 a share.Boyd Enterprises just declared a stock dividend of 4 percent.How many shares will Heidi own and what will be the price per share after the dividend?

Dress Boutique has 8,350 shares of stock outstanding at a price per share of $19.What will be the price per share if the firm pays a $.75 per share dividend and the applicable tax rate is 25 percent? Ignore market imperfections.

Davis Engineering declared a dividend to shareholders of record on Monday, February 8, that is payable on Friday, February 26.Carla knows that her dividend check normally arrives three business days after the check is written.On which one of the following days should she expect to receive her dividend check? Assume a 365-day year.

The clientele effect states that investors fall into various groups because of differences in their preferences for which one of the following?

All of the following investors generally receive a tax break on dividend income with the exception of: