Exam 185: Dividend Policy

One reason why small business concerns have very low dividend payout ratios is that the firm ____.

Dividend reinvestment plans involve the purchase of ____.

The fundamental question in dividend policy is ____.

Omega Sports has the following equity accounts on its balance sheet: Common stock ( \ 0.50 par, 900,000 shares) 450,000 Contributed capital in excess of par 5,580,000 Retained earnings 21,204,000 Total common stockholders' equity \2 7,234,000 ? The current market price of the firm's shares is $20. If the firm declares a 10 percent stock dividend and a cash dividend of $0.10 per share, what would the retained earning account change to?

Rank in chronological sequence the payment date, ex-dividend date, declaration date, and record date.

Grabill Aerospace Company has just declared a 15% stock dividend. Immediately prior to the stock dividend, the stock was selling for $23 and had a P/E ratio of 14. Calculate the post-stock dividend price of Grabill's stock.

Sadaplast has just declared a 25% stock dividend. The annual dividend, before the stock dividend was declared, was $1.00. Sadaplast intends to pay a dividend of $1.05 per share after the stock dividend is paid. What is the percentage increase in the cash dividend that will accompany the stock dividend?

Zimmer Corp. has just declared a 5 for 4 stock split. If the pre-split price of common stock was $36 a share, what will be the post-split price per share (assuming no other changes occur)?

As part of a share repurchase program by a company, a tender offer involves the ____.

The Earth Shoe Company, whose stock has a market value of $20, has the following common equity accounts on its balance sheet: Common stock ( \ 1 par, 1,000,000 shares) \ 1,000,000 Contributed capital in excess of par \ 14,000,000 Retained earnings \ 52,000,000 Total common stockholders' equity \6 7,000,000 ? If the firm declares a 5% stock dividend, what will be the retained earnings figure after the dividend is paid?

Last year, Toluca Engineering paid a $0.25 dividend per share each quarter. If Toluca announces both a 5% stock dividend and an increase in the quarterly dividend to $0.27, what is the effective rate of the dividend increase?

The theoretical post-stock dividend price is equal to the pre-stock dividend price ____ the percentage stock dividend rate.

Which of the following terms BEST summarizes the arguments supporting a stable dollar dividend policy?

Saturn Corporation has just declared a 25% stock dividend. The stock was selling for $18 before the stock dividend. The stock will pay a quarterly cash dividend of 8 cents per share after the stock dividend. If the 8-cent dividend is maintained over the next year, what will be the post-stock dividend yield?

Which of the following is not an alternative dividend policy?

Badger Tool and Die Company has 100,000 shares outstanding and plans to pay $1.00 per share in dividends each quarter next year. Badger has a capital budget of $700,000 for next year and plans to maintain its present debt ratio of 0.30. If earnings are expected to be $7.20 per share, how much external equity must Badger raise?

WPI Inc. has the following current equity accounts on its balance sheet: Common stock (\ 2.50 par, 500,000 shares) \ 1,250,000 Contributed capital in excess of par \ 10,000,000 Retained earnings \ 15,540,000 Total \2 6,790,000 ? If WPI earned $3.20 per share this year, what is the maximum dividend per share that WPI may pay if the state capital impairment provisions are limited to the par value and the contributed capital in excess of par accounts?

Explain the "clientele effect."

Which of the following influences the value of the firm? I. Investment decisions II. Dividend decisions

Dividend payments from foreign subsidiaries represent ____.