Question 1

Which one of these statements is true?

Accepted Answer

A) Transaction and issue costs have no effect on dividend policy. 
B) If the shareholders of an acquired company receive shares in the acquirer rather than cash,they avoid paying taxes. 
C) Stock dividends provide shares that can be used for the exercise of shares under an employee stock option plan. 
D) Individual investors desiring current income need to invest solely in high-dividend stocks. 
E) In the United States,stock sales have exceeded stock repurchases every year since 2008. 
A) Transaction and issue costs have no effect on dividend policy. 
B) If the shareholders of an acquired company receive shares in the acquirer rather than cash,they avoid paying taxes. 
C) Stock dividends provide shares that can be used for the exercise of shares under an employee stock option plan. 
D) Individual investors desiring current income need to invest solely in high-dividend stocks. 
E) In the United States,stock sales have exceeded stock repurchases every year since 2008.

Question 2

KLT just paid an annual dividend of $1.62 a share.The firm has a target payout ratio of 0.55 and a speed of adjustment value of 0.4.What is the expected value of next year's annual dividend if the firm expects its earnings per share to be $3.98?

Accepted Answer

A) $2.50 
B) $1.85 
C) $1.74 
D) $1.92 
E) $1.71 
A) $2.50 
B) $1.85 
C) $1.74 
D) $1.92 
E) $1.71

Question 3

A ________ is an alternative method to cash dividends that is used to distribute a firm's earnings to shareholders.

Accepted Answer

A) merger 
B) reverse stock split 
C) payment-in-kind 
D) share repurchase 
E) stock split 
A) merger 
B) reverse stock split 
C) payment-in-kind 
D) share repurchase 
E) stock split

Question 4

The fact that flotation costs can be significant is justification for

Accepted Answer

A) maintaining a high dividend policy. 
B) maintaining a low dividend policy and rarely issuing extra dividends. 
C) maintaining a constant dividend policy even when profits decline significantly. 
D) a firm to issue larger dividends than its closest competitors. 
E) a firm to maintain a constant dividend policy even if it frequently has to issue new shares of stock to do so. 
A) maintaining a high dividend policy. 
B) maintaining a low dividend policy and rarely issuing extra dividends. 
C) maintaining a constant dividend policy even when profits decline significantly. 
D) a firm to issue larger dividends than its closest competitors. 
E) a firm to maintain a constant dividend policy even if it frequently has to issue new shares of stock to do so.

Question 5

The dividend amount divided by the earnings per share amount is referred to as the dividend

Accepted Answer

A) yield. 
B) per share. 
C) payment. 
D) payout. 
E) declaration. 
A) yield. 
B) per share. 
C) payment. 
D) payout. 
E) declaration.

Question 6

Reverse stock splits can be used to

Accepted Answer

A) adjust the debt-equity ratio such that it falls within a preferred range. 
B) increase the excess cash held by a firm. 
C) increase both the number of shares outstanding and the market price per share simultaneously. 
D) increase the total equity of a firm. 
E) avoid delisting. 
A) adjust the debt-equity ratio such that it falls within a preferred range. 
B) increase the excess cash held by a firm. 
C) increase both the number of shares outstanding and the market price per share simultaneously. 
D) increase the total equity of a firm. 
E) avoid delisting.

Question 7

In respect to a balance sheet,a stock split will

Accepted Answer

A) not affect the total value of any of the equity accounts. 
B) increase the total value of the common stock account. 
C) decrease the total book value of owners' equity. 
D) increase the value of the capital in excess of par value account. 
E) decrease the value of the retained earnings account. 
A) not affect the total value of any of the equity accounts. 
B) increase the total value of the common stock account. 
C) decrease the total book value of owners' equity. 
D) increase the value of the capital in excess of par value account. 
E) decrease the value of the retained earnings account.

Question 8

Quick Mart has been paying a quarterly dividend of $1.20 a share.Which of the following are valid reasons for the firm to reduce or eliminate these dividends? I.The firm is on the verge of violating a bond restriction.
II)The firm wants to save cash for an acquisition with a 40 percent premium.
III)The firm can raise new capital easily at a very low cost.
IV)Congress just changed the tax laws eliminating all taxes on capital gains.

Accepted Answer

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

Question 9

Shareholders are more apt to prefer a high dividend payout if a firm

Accepted Answer

A) has high flotation costs. 
B) has a high rate of growth which requires additional funding. 
C) offers high capital gains that are taxed at a favorable rate. 
D) has lower tax rates than the shareholder. 
E) will spend the funds on a high-premium acquisition if the dividend is not paid. 
A) has high flotation costs. 
B) has a high rate of growth which requires additional funding. 
C) offers high capital gains that are taxed at a favorable rate. 
D) has lower tax rates than the shareholder. 
E) will spend the funds on a high-premium acquisition if the dividend is not paid.

Question 10

On May 18th,you purchased 900 shares of LKM stock.On June 1st,you sold 100 shares of this stock for $32 a share.You sold an additional 200 shares on July 6th at a price of $34.50 a share.The company declared a per share dividend of $.33 on June 20th to holders of record as of Friday,July 8th.This dividend is payable on July 29th.How much dividend income will you receive on July 29th as a result of your ownership of LKM stock?

Accepted Answer

A) $0 
B) $198 
C) $240 
D) $264 
E) $297 
A) $0 
B) $198 
C) $240 
D) $264 
E) $297

Question 11

Which statement is correct?

Accepted Answer

A) Total owner's equity decreases with a small stock dividend but not with a large stock dividend. 
B) A large stock dividend increases both the common stock and the capital in excess of par value account values. 
C) Stock dividends of 40 percent or less are called small stock dividends. 
D) Stock splits and stock dividends have been definitively proven to have no effect on a firm's market value. 
E) A small stock dividend increases both the par value per share and the value of the capital in excess of par value account. 
A) Total owner's equity decreases with a small stock dividend but not with a large stock dividend. 
B) A large stock dividend increases both the common stock and the capital in excess of par value account values. 
C) Stock dividends of 40 percent or less are called small stock dividends. 
D) Stock splits and stock dividends have been definitively proven to have no effect on a firm's market value. 
E) A small stock dividend increases both the par value per share and the value of the capital in excess of par value account.

Question 12

Which one of these statements is correct regarding various types of investors?

Accepted Answer

A) Taxpayers in high tax brackets tend to prefer dividends over capital gains. 
B) Pension funds are taxed at a low rate of 10 percent on both dividends and capital gains. 
C) Corporations can exclude at least 70 percent of their dividend income from taxes. 
D) Pension funds pay taxes on capital gains but not on dividends. 
E) Corporations can exclude at least 70 percent of both their dividend income and capital gains from taxes. 
A) Taxpayers in high tax brackets tend to prefer dividends over capital gains. 
B) Pension funds are taxed at a low rate of 10 percent on both dividends and capital gains. 
C) Corporations can exclude at least 70 percent of their dividend income from taxes. 
D) Pension funds pay taxes on capital gains but not on dividends. 
E) Corporations can exclude at least 70 percent of both their dividend income and capital gains from taxes.

Question 13

Robinson's has 12,000 shares of stock outstanding with a par value of $1 per share and a market price of $24.20 a share.The firm just announced a four-for-three stock split.What will the market price per share be after the split?

Accepted Answer

A) $18.15 
B) $17.65 
C) $18.25 
D) $30.46 
E) $32.27 
A) $18.15 
B) $17.65 
C) $18.25 
D) $30.46 
E) $32.27

Question 14

The date by which a stockholder must be registered on the firm's roll as having share ownership in order to receive a declared dividend is called the

Accepted Answer

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

Question 15

Companies are more apt to choose repurchases over dividends if doing so will enable them to I.take advantage of a market undervaluation of their shares.
II)maintain or increase the value of executive stock options.
III)offset the dilution created by the exercise of executive stock options.
IV)distribute revenue increases that are considered to be temporary or short-term in nature.

Accepted Answer

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

Question 16

The date on which the board of directors passes a resolution authorizing payment of a dividend to the shareholders is the ________ date.

Accepted Answer

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

Question 17

The date before which a new purchaser of stock is entitled to receive a declared dividend,but on or after which she does not receive the dividend,is called the ________ date.

Accepted Answer

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

Question 18

Agency costs provide justification for

Accepted Answer

A) higher dividends over lower dividends. 
B) stock repurchases over cash dividends. 
C) stock splits rather the stock repurchases. 
D) issuing shares rather than repurchasing shares. 
E) stock dividends over cash dividends. 
A) higher dividends over lower dividends. 
B) stock repurchases over cash dividends. 
C) stock splits rather the stock repurchases. 
D) issuing shares rather than repurchasing shares. 
E) stock dividends over cash dividends.

Question 19

New Built wants to repurchase 15,000 of its shares at $32 a share through a tender offer.Shareholders responded by offering 18,500 shares.Assume you are a shareholder and offered your 400 shares as part of the shareholder response.How many of your shares should you expect New Built to purchase?

Accepted Answer

A) 0 shares 
B) 400 shares 
C) 348 shares 
D) 324 shares 
E) 279 shares 
A) 0 shares 
B) 400 shares 
C) 348 shares 
D) 324 shares 
E) 279 shares

Question 20

How frequently do dividend-paying firms in the United States generally pay regular cash dividends?

Accepted Answer

A) Annually 
B) Semiannually 
C) Quarterly 
D) Monthly 
E) Biannually 
A) Annually 
B) Semiannually 
C) Quarterly 
D) Monthly 
E) Biannually

Which one of these statements is true?

KLT just paid an annual dividend of $1.62 a share.The firm has a target payout ratio of 0.55 and a speed of adjustment value of 0.4.What is the expected value of next year's annual dividend if the firm expects its earnings per share to be $3.98?

A ________ is an alternative method to cash dividends that is used to distribute a firm's earnings to shareholders.

The fact that flotation costs can be significant is justification for

The dividend amount divided by the earnings per share amount is referred to as the dividend

Reverse stock splits can be used to

In respect to a balance sheet,a stock split will

Shareholders are more apt to prefer a high dividend payout if a firm

Which statement is correct?

Which one of these statements is correct regarding various types of investors?

Robinson's has 12,000 shares of stock outstanding with a par value of $1 per share and a market price of $24.20 a share.The firm just announced a four-for-three stock split.What will the market price per share be after the split?

The date by which a stockholder must be registered on the firm's roll as having share ownership in order to receive a declared dividend is called the

The date on which the board of directors passes a resolution authorizing payment of a dividend to the shareholders is the ________ date.

The date before which a new purchaser of stock is entitled to receive a declared dividend,but on or after which she does not receive the dividend,is called the ________ date.

Agency costs provide justification for

New Built wants to repurchase 15,000 of its shares at $32 a share through a tender offer.Shareholders responded by offering 18,500 shares.Assume you are a shareholder and offered your 400 shares as part of the shareholder response.How many of your shares should you expect New Built to purchase?

How frequently do dividend-paying firms in the United States generally pay regular cash dividends?

Introduction to Corporate Finance

Financial Statements AMCQ Cash Flow

Financial Statements Analysis Amcq Financial Models

Discounted Cash Flow Valuation

Interest Rates AMCQ Bomcq Valuation

Stock Valuation

Net Present Value AMCQ Other Investment Rules

Making Capital Investment Decisions

Risk Analysis, Real Options, AMCQ Capital Budgeting

Risk Amcq Return: Lessons From Market History

Return Amcq Risk: the Capital Asset Pricing Model Capm

Risk, cost of Capital, AMCQ Valuation

Efficient Capital Markets Amcq Behavioral Challenges

Capital Structure: Basic Concepts

Capital Structure: Limits to the Use of Debt

Options Amcq Corporate Finance

Short-Term Finance Amcq Planning

Raising Capital

International Corporate Finance

Mergers Amcq Acquisitions Web Only

Filters

Exam 16: Dividemcqs AMCQ Other Payouts

Which one of these statements is true?

KLT just paid an annual dividend of $1.62 a share.The firm has a target payout ratio of 0.55 and a speed of adjustment value of 0.4.What is the expected value of next year's annual dividend if the firm expects its earnings per share to be $3.98?

A ________ is an alternative method to cash dividends that is used to distribute a firm's earnings to shareholders.

The fact that flotation costs can be significant is justification for

The dividend amount divided by the earnings per share amount is referred to as the dividend

Reverse stock splits can be used to

In respect to a balance sheet,a stock split will

Shareholders are more apt to prefer a high dividend payout if a firm

Which statement is correct?

Which one of these statements is correct regarding various types of investors?

Robinson's has 12,000 shares of stock outstanding with a par value of $1 per share and a market price of $24.20 a share.The firm just announced a four-for-three stock split.What will the market price per share be after the split?

The date by which a stockholder must be registered on the firm's roll as having share ownership in order to receive a declared dividend is called the

The date on which the board of directors passes a resolution authorizing payment of a dividend to the shareholders is the ________ date.

The date before which a new purchaser of stock is entitled to receive a declared dividend,but on or after which she does not receive the dividend,is called the ________ date.

Agency costs provide justification for

New Built wants to repurchase 15,000 of its shares at $32 a share through a tender offer.Shareholders responded by offering 18,500 shares.Assume you are a shareholder and offered your 400 shares as part of the shareholder response.How many of your shares should you expect New Built to purchase?

How frequently do dividend-paying firms in the United States generally pay regular cash dividends?

Introduction to Corporate Finance

Financial Statements AMCQ Cash Flow

Financial Statements Analysis Amcq Financial Models

Discounted Cash Flow Valuation

Interest Rates AMCQ Bomcq Valuation

Stock Valuation

Net Present Value AMCQ Other Investment Rules

Making Capital Investment Decisions

Risk Analysis, Real Options, AMCQ Capital Budgeting

Risk Amcq Return: Lessons From Market History

Return Amcq Risk: the Capital Asset Pricing Model Capm

Risk, cost of Capital, AMCQ Valuation

Efficient Capital Markets Amcq Behavioral Challenges

Capital Structure: Basic Concepts

Capital Structure: Limits to the Use of Debt

Options Amcq Corporate Finance

Short-Term Finance Amcq Planning

Raising Capital

International Corporate Finance

Mergers Amcq Acquisitions Web Only

Filters