Exam 18: Long-Term Financial Planning

You own 1,000 shares of Xytech Corporation, whose shares are currently trading at $50.The company has disclosed that it will raise its dividend from $0.75 to $1.You would prefer that the dividend remain at its current level.What can be done to offset the effects of the increase in dividends?

How are dividends paid and how do companies decide on dividend payments?

A corporation that has an automatic reinvestment plan:

When the firm has a high retention ratio, thus paying low dividends, the dividend is a by-product of what kind of decision?

What is the most likely prediction after a firm reduces its regular dividend payment?

A share repurchase is said to be equivalent to the payment of a cash dividend because each strategy:

The primary purpose of laws prohibiting a firm from paying dividends that include its legal capital is to:

Global Inc.'s shares are selling for $36 per share.Determine the new price per share, if the company a 4 for 6 reverse stock split.

A corporation's dividend payout ratio is the %age of _____ paid out as dividends.

Those economists feeling that low dividend payouts will increase share price focus on:

MM's proposition of dividend irrelevance depends upon:

A firm's dividend policy involves a trade-off between:

How will your investment in Acme Corp.change if you currently own 100 shares valued at $10 each and Acme has just declared a 10% stock dividend? Before the stock dividend there were 2,000 shares outstanding.

Of the following, who has tax benefits for preferring dividends?

A 100% stock dividend results in a doubling of the number of outstanding shares, but they do not affect the company's assets, profits, or total value.

A dividend does not accompany stocks that are purchased on the ex-dividend date.

An investor who owns stock on the company's __________ date will receive the dividends declared.

How much should an investor pay now for a stock expected to sell for $30 one year from now if: the stock offers a $2 dividend, dividends are taxed at 40%, capital gains are taxed at 20%, and a 15% after-tax return is expected on the investment?

Corporate dividends are less volatile than corporate earnings.

Which of the following statements regarding stock dividends and stock splits is true: