Question 1

Payments made out of a firm's earnings to its owners in the form of cash or stock are called

Accepted Answer

A) stock splits. 
B) distributions. 
C) dividends. 
D) payments-in-kind. 
E) share repurchases. 
A) stock splits. 
B) distributions. 
C) dividends. 
D) payments-in-kind. 
E) share repurchases.

Question 2

If you want to receive the recently declared dividend on ABG stock,you must purchase your shares ________ or more business day(s)prior to the date of record.

Accepted Answer

A) four 
B) one 
C) two 
D) three 
E) five 
A) four 
B) one 
C) two 
D) three 
E) five

Question 3

The information content of a regular dividend increase generally signals that

Accepted Answer

A) management believes the future earnings of the firm will be strong. 
B) the firm has recently sold a subsidiary. 
C) the firm has a one-time surplus of cash. 
D) the firm has more cash than it needs due to declining sales. 
E) future dividends will be lower. 
A) management believes the future earnings of the firm will be strong. 
B) the firm has recently sold a subsidiary. 
C) the firm has a one-time surplus of cash. 
D) the firm has more cash than it needs due to declining sales. 
E) future dividends will be lower.

Question 4

The date on which the firm mails out its declared dividends is called the

Accepted Answer

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

Question 5

Pluto's has 15,300 shares of stock outstanding with a par value of $1 per share and a market value of $22.10 per share.The balance sheet shows $324,800 in the capital in excess of par account,$15,300 in the common stock account,and $174,700 in the retained earnings account.The firm just announced a small stock dividend of 12 percent.What will be the balance in the retained earnings account after the dividend?

Accepted Answer

A) $129,700.00 
B) $134,124.40 
C) $128,309.18 
D) $132,360.00 
E) $128,509.90 
A) $129,700.00 
B) $134,124.40 
C) $128,309.18 
D) $132,360.00 
E) $128,509.90

Question 6

The Retail Outlet has 17,500 shares of stock outstanding with a par value of $1 per share.The current book value of the firm is $387,800 and the balance in the capital in excess of par value account is $146,300.The company just announced a four-for-three stock split.What will be the common stock account balance after the split?

Accepted Answer

A) $11,000 
B) $13,125 
C) $23,333 
D) $14,500 
E) $17,500 
A) $11,000 
B) $13,125 
C) $23,333 
D) $14,500 
E) $17,500

Question 7

Lisa purchased 200 shares of ABC stock on May 15th.On May 21st,she purchased another 200 shares,and then on May 22nd,she purchased 200 additional shares.The company declared a dividend of $1.47 a share on May 5th to holders of record on Friday,May 23rd.The dividend is payable on May 31st.How much dividend income will she receive on May 31st from ABC?

Accepted Answer

A) $0 
B) $294 
C) $234 
D) $468 
E) $588 
A) $0 
B) $294 
C) $234 
D) $468 
E) $588

Question 8

A cash payment made by a firm to its owners when some of the firm's assets are sold off is called a(n)

Accepted Answer

A) extra cash dividend. 
B) special dividend. 
C) regular cash dividend. 
D) liquidating dividend. 
E) share repurchase. 
A) extra cash dividend. 
B) special dividend. 
C) regular cash dividend. 
D) liquidating dividend. 
E) share repurchase.

Question 9

Luis owns 300 shares of a stock that plans to pay a special $4.65 per share dividend 1 year from today and a final $.32 per share dividend 2 years from today.He does not desire any dividend income in 2 years but wants all of his dividends in 1 year.He can borrow and lend at 9 percent.Ignoring taxes,what will be his total homemade dividend in 1 year?

Accepted Answer

A) $1,306.93 
B) $1,491.00 
C) $1,208.15 
D) $1,616.55 
E) $1,845.15 
A) $1,306.93 
B) $1,491.00 
C) $1,208.15 
D) $1,616.55 
E) $1,845.15

Question 10

Which one of these statements is true?

Accepted Answer

A) Managers tend to benefit more from decreasing a firm's size rather than increasing its size. 
B) Dividend payout policies are always set according to the best interest of the shareholders. 
C) Acquisitions are generally believed to be an excellent alternative to dividends. 
D) The IRS code discourages the accumulation of surplus cash thereby encouraging dividends. 
E) Current tax law favors dividends over repurchases from the stockholders' point of view. 
A) Managers tend to benefit more from decreasing a firm's size rather than increasing its size. 
B) Dividend payout policies are always set according to the best interest of the shareholders. 
C) Acquisitions are generally believed to be an excellent alternative to dividends. 
D) The IRS code discourages the accumulation of surplus cash thereby encouraging dividends. 
E) Current tax law favors dividends over repurchases from the stockholders' point of view.

Question 11

The indifference policy advocates that

Accepted Answer

A) dividends are irrelevant. 
B) firms are indifferent to dividend policy but stockholders are not. 
C) stockholders are indifferent to dividend policy only as long as dividends are held constant. 
D) dividend policy is irrelevant as long as the firm's investment policy is modified for dividend changes. 
E) dividend policy is irrelevant. 
A) dividends are irrelevant. 
B) firms are indifferent to dividend policy but stockholders are not. 
C) stockholders are indifferent to dividend policy only as long as dividends are held constant. 
D) dividend policy is irrelevant as long as the firm's investment policy is modified for dividend changes. 
E) dividend policy is irrelevant.

Question 12

A stock currently sells for $65.70 a share.What type of stock split would be best if the stock's proper trading range centers on $22 a share?

Accepted Answer

A) two-for-five reverse stock split 
B) one-for-three reverse stock split 
C) two-for-three reverse stock split 
D) five-for-two stock split 
E) three-for-one stock split 
A) two-for-five reverse stock split 
B) one-for-three reverse stock split 
C) two-for-three reverse stock split 
D) five-for-two stock split 
E) three-for-one stock split

Question 13

Which of the following tend to keep dividends low? I.Potential for companies to use excess cash on negative NPV projects
II)Restrictive terms contained in bond indenture agreements
III)Manager's desire to maintain constant dividends over time
IV)Flotation costs

Accepted Answer

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

Question 14

Which one of these statements is correct regarding large U.S.firms for the period 2004 to 2014?

Accepted Answer

A) Common dividends outpaced share repurchases for the majority of the years during the period. 
B) Share repurchases tend to be steadier from year to year than are common dividends. 
C) Both common dividends and share repurchases were lower in 2014 than they were in 2004. 
D) Corporate earnings tend to be more volatile than either stock dividends or repurchases. 
E) Common dividends decreased more than share repurchases during the period 2008 to 2009. 
A) Common dividends outpaced share repurchases for the majority of the years during the period. 
B) Share repurchases tend to be steadier from year to year than are common dividends. 
C) Both common dividends and share repurchases were lower in 2014 than they were in 2004. 
D) Corporate earnings tend to be more volatile than either stock dividends or repurchases. 
E) Common dividends decreased more than share repurchases during the period 2008 to 2009.

Question 15

Of the following factors,which one is considered to be the primary factor affecting a firm's dividend decision?

Accepted Answer

A) The personal taxes company stockholders incur on dividend distributions 
B) Maintaining consistency with the historical dividend policy 
C) Attracting retail investors 
D) Attracting institutional investors 
E) Sustainable changes in earnings 
A) The personal taxes company stockholders incur on dividend distributions 
B) Maintaining consistency with the historical dividend policy 
C) Attracting retail investors 
D) Attracting institutional investors 
E) Sustainable changes in earnings

Question 16

Which of these are common characteristics of a tender offer? I.The offer can be cancelled if less than the desired number of shares are offered.
II)Sellers are unaware that the buyer is the issuer of the security.
III)The offers made by the sellers determine the price.
IV)The offer price is generally greater than the market price.

Accepted Answer

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

Question 17

How can management best signal the market that a firm is doing well?

Accepted Answer

A) Distribute a liquidating dividend 
B) Issue additional shares of stock 
C) Increase the regular dividend amount 
D) Issue stock to pay the regular dividend 
E) Replace the regular dividend with a stock dividend 
A) Distribute a liquidating dividend 
B) Issue additional shares of stock 
C) Increase the regular dividend amount 
D) Issue stock to pay the regular dividend 
E) Replace the regular dividend with a stock dividend

Question 18

Corner Mart has 130,000 shares of stock outstanding with a par value of $1 per share and a market value of $38.40 per share.The firm just announced a small stock dividend of 15 percent.What will be the market price per share after the dividend?

Accepted Answer

A) $32.90 
B) $33.39 
C) $38.40 
D) $41.08 
E) $44.16 
A) $32.90 
B) $33.39 
C) $38.40 
D) $41.08 
E) $44.16

Question 19

A firm has a market value equal to its book value,excess cash of $400,other assets of $9,200,and equity of $9,800.The firm has 500 shares of stock outstanding and net income of $420.The firm has decided to spend all of its excess cash on a share repurchase program.How many shares of stock will be outstanding after the stock repurchase is completed?

Accepted Answer

A) 440 shares 
B) 445 shares 
C) 480 shares 
D) 910 shares 
E) 915 shares 
A) 440 shares 
B) 445 shares 
C) 480 shares 
D) 910 shares 
E) 915 shares

Payments made out of a firm's earnings to its owners in the form of cash or stock are called

If you want to receive the recently declared dividend on ABG stock,you must purchase your shares ________ or more business day(s)prior to the date of record.

The information content of a regular dividend increase generally signals that

The date on which the firm mails out its declared dividends is called the

A cash payment made by a firm to its owners when some of the firm's assets are sold off is called a(n)

Which one of these statements is true?

The indifference policy advocates that

A stock currently sells for $65.70 a share.What type of stock split would be best if the stock's proper trading range centers on $22 a share?

Which of the following tend to keep dividends low? I.Potential for companies to use excess cash on negative NPV projects II)Restrictive terms contained in bond indenture agreements III)Manager's desire to maintain constant dividends over time IV)Flotation costs

Which one of these statements is correct regarding large U.S.firms for the period 2004 to 2014?

Of the following factors,which one is considered to be the primary factor affecting a firm's dividend decision?

How can management best signal the market that a firm is doing well?

Corner Mart has 130,000 shares of stock outstanding with a par value of $1 per share and a market value of $38.40 per share.The firm just announced a small stock dividend of 15 percent.What will be the market price per share after the dividend?

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

Payments made out of a firm's earnings to its owners in the form of cash or stock are called

If you want to receive the recently declared dividend on ABG stock,you must purchase your shares ________ or more business day(s)prior to the date of record.

The information content of a regular dividend increase generally signals that

The date on which the firm mails out its declared dividends is called the

A cash payment made by a firm to its owners when some of the firm's assets are sold off is called a(n)

Which one of these statements is true?

The indifference policy advocates that

A stock currently sells for $65.70 a share.What type of stock split would be best if the stock's proper trading range centers on $22 a share?

Which of the following tend to keep dividends low? I.Potential for companies to use excess cash on negative NPV projects II)Restrictive terms contained in bond indenture agreements III)Manager's desire to maintain constant dividends over time IV)Flotation costs

Which one of these statements is correct regarding large U.S.firms for the period 2004 to 2014?

Of the following factors,which one is considered to be the primary factor affecting a firm's dividend decision?

How can management best signal the market that a firm is doing well?

Corner Mart has 130,000 shares of stock outstanding with a par value of $1 per share and a market value of $38.40 per share.The firm just announced a small stock dividend of 15 percent.What will be the market price per share after the dividend?

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