Exam 17: Dividends and Payout Policy

Randall's has 34,000 shares of stock outstanding with a par value of $1 per share. The market value is $23 per share. The balance sheet shows $152,000 in the capital in excess of par account, $34,000 in the common stock account, and $67,500 in the retained earnings account. The firm just announced a 5 percent (small) stock dividend. What will be the balance in the retained earnings account after the dividend?

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:

The owners' equity accounts for Buel Industries include common stock of $24,000 with a $1 par value, capital in excess of par value of $287,000, and retained earnings of $408,500. How many shares will be outstanding and what will be the par value per share if the firm declares a reverse stock split of one-for-four?

Frozen Foods just paid out $3.62 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?

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

Josh's Inc. has 4,800 shares of stock outstanding with a par value of $1 per share and a market value of $19 a share. The balance sheet shows $149,000 in the capital in excess of par account, $4,800 in the common stock account, and $192,800 in the retained earnings account. The firm just announced a stock dividend of 10 percent. What is the value of the capital in excess of par account after the dividend?

The fact that flotation costs can be significant is an argument for:

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

Aaron purchased 500 shares of KMP stock on May 8. On May 16, he purchased another 200 shares and then on May 20 he purchased a final 100 shares of KMP stock. The company declared a dividend of $.94 a share on May 6 to holders of record on Friday, May 22. The dividend is payable on June 12. How much dividend income will Steve receive on June 12?

What is the information content effect?

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

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

Verbal Communications has 18,400 shares of stock outstanding with a par value of $1 per share and a market value of $43 per share. The firm just announced a stock dividend of 100 percent. What is the market value per share after the dividend?

Alfonzo's Italian House has 17,000 shares of stock outstanding with a par value of $1 per share and a market price of $24.60 a share. The firm just announced a stock split of three-for-two. What will be the market price per share after the split?

The dividend market is in equilibrium when:

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

Built Rite Corp. is evaluating an extra dividend versus a share repurchase. In either case, $7,500 would be spent. Current earnings are $1.24 per share, and the stock currently sells for $32 per share. There are 5,000 shares outstanding. Ignore taxes and other imperfections. You own one share of stock in this company. If the company issues the dividend, your total investment will be worth ________ as compared to ________ if the company opts for a share repurchase.

United Foods declared a dividend of $.62 a share 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?

The ex-dividend date is defined as ________ business day(s) prior to the date of record

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