Question 1

What effect does a stock split have on outstanding shares of stock and what is its purpose?

Accepted Answer

A stock split has the effect of increasi

Question 2

Finance researcher Myron Gordon argues that ____.

Accepted Answer

A)  risk-averse shareholders may prefer some dividends over the promise of future capital gains if the interest rate is expected to decline 
B)  dividends reduce uncertainty, and thus the payment of dividends will increase the firm's value 
C)  the clientele effect has no influence on share value 
D)  the existence of transaction costs has no impact on the dividend decision 
A)  risk-averse shareholders may prefer some dividends over the promise of future capital gains if the interest rate is expected to decline 
B)  dividends reduce uncertainty, and thus the payment of dividends will increase the firm's value 
C)  the clientele effect has no influence on share value 
D)  the existence of transaction costs has no impact on the dividend decision

Question 3

In order for a stock to qualify for inclusion on the "legal lists," a firm must ____.

Accepted Answer

A)  register with the Securities Exchange Commission (SE
C)  
B)  have assets in excess of $500,000 
C)  have 10 continuous profitable quarters 
D)  have a record of continuous and stable dividends 
A)  register with the Securities Exchange Commission (SE
C)  
B)  have assets in excess of $500,000 
C)  have 10 continuous profitable quarters 
D)  have a record of continuous and stable dividends

Question 4

Which of the following is NOT a direct result of a stock dividend?

Accepted Answer

A)  The number of shares outstanding is increased. 
B)  The market price of each outstanding share is increased. 
C)  The amounts shown in the firm's capital accounts are redistributed. 
D)  The per-share price of the stock goes up. 
A)  The number of shares outstanding is increased. 
B)  The market price of each outstanding share is increased. 
C)  The amounts shown in the firm's capital accounts are redistributed. 
D)  The per-share price of the stock goes up.

Question 5

Kaneb Services Inc. has just declared a 3 for 2 stock split. If the pre-split price of common stock was $42 a share, what will be the post-split price per share (assuming no other changes occur)?

Accepted Answer

A)  $31.50 
B)  $26.25 
C)  $25.15 
D)  $28.00 
A)  $31.50 
B)  $26.25 
C)  $25.15 
D)  $28.00

Question 6

Several regulations limit dividend payments. Which of the following do not limit dividend payments?

Accepted Answer

A)  Capital impairment restriction 
B)  Restrictive covenants 
C)  Net earnings restriction 
D)  Liability restriction 
A)  Capital impairment restriction 
B)  Restrictive covenants 
C)  Net earnings restriction 
D)  Liability restriction

Question 7

The record date in the normal dividend payment procedure is ____.

Accepted Answer

A)  the same day as the declaration date 
B)  the same day as the ex-dividend date 
C)  the date when the firm makes a list from its stock transfer books of shareholders eligible to receive the dividend 
D)  one day prior to the payment date 
A)  the same day as the declaration date 
B)  the same day as the ex-dividend date 
C)  the date when the firm makes a list from its stock transfer books of shareholders eligible to receive the dividend 
D)  one day prior to the payment date

Question 8

Cafe de Oro earns $4.25 per share and has a dividend payout ratio of 0.40. If Cafe de Oro has a capital budget of $200,000 and 70,000 shares outstanding, what are the annual dividends per share?

Accepted Answer

A)  $1.70 
B)  $1.39 
C)  $2.55 
D)  $4.00 
A)  $1.70 
B)  $1.39 
C)  $2.55 
D)  $4.00

Question 9

Under dividend reinvestment plans, shareholders can automatically ____.

Accepted Answer

A)  reduce their taxable income 
B)  increase their cash inflows 
C)  use dividends to purchase additional shares 
D)  transfer from retained earnings accounts to equity accounts. 
A)  reduce their taxable income 
B)  increase their cash inflows 
C)  use dividends to purchase additional shares 
D)  transfer from retained earnings accounts to equity accounts.

Question 10

On the ex-dividend date, the ____.

Accepted Answer

A)  seller of the stock is entitled to the dividend 
B)  buyer has four business days to register his/her purchase 
C)  buyer of the stock is entitled to the dividend 
D)  corporation records all security owners 
A)  seller of the stock is entitled to the dividend 
B)  buyer has four business days to register his/her purchase 
C)  buyer of the stock is entitled to the dividend 
D)  corporation records all security owners

Question 11

Last year, Quality's earnings per share were $2.34 and it paid a dividend of $1.10. What was Quality's dividend payout ratio?

Accepted Answer

A)  21.2% 
B)  42.7% 
C)  47% 
D)  53% 
A)  21.2% 
B)  42.7% 
C)  47% 
D)  53%

Question 12

The Barden Corporation has the following equity accounts on its balance sheet: $\begin{array}{lr}
\text { Common Stock ( } \$ 1.25 \text { par, } 3,000,000 \text { shares) } & \$, 750,000 \
\text { Contributed capital in excess of par } & 24,250,000 \
\text { Retained earnings } & 153,600,000 \
\text { Total common stockhol ders' equity }&\$181,600,000
\end{array}$ ? What is the maximum amount of dividends per share that may be paid by the Barden Corp. if the capital impairment provisions of state law are limited to the par value and the capital in excess of par accounts?

Accepted Answer

A)  $59.28 
B)  $51.20 
C)  $60.53 
D)  $8.08 
A)  $59.28 
B)  $51.20 
C)  $60.53 
D)  $8.08

Question 13

The net effect of a stock dividend is to increase ____.

Accepted Answer

A)  the firm's total stockholders' equity 
B)  the number of shares outstanding 
C)  total dividends 
D)  stock prices 
A)  the firm's total stockholders' equity 
B)  the number of shares outstanding 
C)  total dividends 
D)  stock prices

What effect does a stock split have on outstanding shares of stock and what is its purpose?

Finance researcher Myron Gordon argues that ____.

In order for a stock to qualify for inclusion on the "legal lists," a firm must ____.

Which of the following is NOT a direct result of a stock dividend?

Kaneb Services Inc. has just declared a 3 for 2 stock split. If the pre-split price of common stock was $42 a share, what will be the post-split price per share (assuming no other changes occur)?

Several regulations limit dividend payments. Which of the following do not limit dividend payments?

The record date in the normal dividend payment procedure is ____.

Cafe de Oro earns $4.25 per share and has a dividend payout ratio of 0.40. If Cafe de Oro has a capital budget of $200,000 and 70,000 shares outstanding, what are the annual dividends per share?

Under dividend reinvestment plans, shareholders can automatically ____.

On the ex-dividend date, the ____.

Last year, Quality's earnings per share were $2.34 and it paid a dividend of $1.10. What was Quality's dividend payout ratio?

The net effect of a stock dividend is to increase ____.

The Role and Objective of Financial Management

The Domestic and International Financial Marketplace

Evaluation of Financial Performance

Financial Planning and Forecasting

The Time Value of Money

Continuous Compounding and Discounting

Fixed Income Securities: Characteristics and Valuation

Common Stock: Characteristics, Valuation, and Issuance

Analysis of Risk and Return

Capital Budgeting and Cash Flow Analysis

Mutually Exclusive Investments Having Unequal Lives

Capital Budgeting: Decision Criteria and Real Option Considerations

Capital Budgeting and Risk

The Cost of Capital

Capital Structure Concepts

Breakeven Analysis

Capital Structure Management in Practice

Working Capital Policy and Short-Term Financing

The Management of Cash and Marketable Securities

The Management of Accounts Receivable and Inventories

Lease and Intermediate Term Financing

Financing With Derivatives

Bond Refunding Analysis

Risk Management

International Financial Management

Corporate Restructuring

Filters

Exam 185: Dividend Policy

What effect does a stock split have on outstanding shares of stock and what is its purpose?

Finance researcher Myron Gordon argues that ____.

In order for a stock to qualify for inclusion on the "legal lists," a firm must ____.

Which of the following is NOT a direct result of a stock dividend?

Kaneb Services Inc. has just declared a 3 for 2 stock split. If the pre-split price of common stock was $42 a share, what will be the post-split price per share (assuming no other changes occur)?

Several regulations limit dividend payments. Which of the following do not limit dividend payments?

The record date in the normal dividend payment procedure is ____.

Cafe de Oro earns $4.25 per share and has a dividend payout ratio of 0.40. If Cafe de Oro has a capital budget of $200,000 and 70,000 shares outstanding, what are the annual dividends per share?

Under dividend reinvestment plans, shareholders can automatically ____.

On the ex-dividend date, the ____.

Last year, Quality's earnings per share were $2.34 and it paid a dividend of $1.10. What was Quality's dividend payout ratio?

The net effect of a stock dividend is to increase ____.

The Role and Objective of Financial Management

The Domestic and International Financial Marketplace

Evaluation of Financial Performance

Financial Planning and Forecasting

The Time Value of Money

Continuous Compounding and Discounting

Fixed Income Securities: Characteristics and Valuation

Common Stock: Characteristics, Valuation, and Issuance

Analysis of Risk and Return

Capital Budgeting and Cash Flow Analysis

Mutually Exclusive Investments Having Unequal Lives

Capital Budgeting: Decision Criteria and Real Option Considerations

Capital Budgeting and Risk

The Cost of Capital

Capital Structure Concepts

Breakeven Analysis

Capital Structure Management in Practice

Working Capital Policy and Short-Term Financing

The Management of Cash and Marketable Securities

The Management of Accounts Receivable and Inventories

Lease and Intermediate Term Financing

Financing With Derivatives

Bond Refunding Analysis

Risk Management

International Financial Management

Corporate Restructuring

Filters