Exam 18: Long-Term Financial Planning

Congratulations! A stock of which you own 100 shares has just split three for two.Its market price before the split was $30 per share.Now discuss what you would expect to happen with this stock and your ownership interests.

Compare the after-tax returns for a corporation that invests in preferred stock with a 12% dividend versus a common stock with no dividend but a 16% capital gain.The corporation's tax rate is 35%.The:

A dividend clientele effect assumes that:

Discuss the concept of dividend "smoothing."

Boards of directors may be legally restricted in their declaration of dividends if:

In a three for two stock split for a company that previously had 1 million shares outstanding selling at $100 per share and a total market value of $100 million, which of the following is true:

The stock in your portfolio was selling for $40 per share yesterday, but has today declared a three for two split.Which of the following statements seems to be true?

How can a 10% dividend be "homemade" by an investor that owns 100 non-dividend-paying shares priced at $20 each?

Canadian corporations are likely to prefer dividends over capital gains on their own investments.

Managers have been characterized as reluctant to increase dividends if:

The Beta Corporation had 1,000 shares outstanding and a market value of $90,000 prior to the declaration of a $5 per share dividend.To finance a new project they will issue equity and the end result will be that the market value of the firm:

Which of the following statements is correct for stock purchased on the last day to trade "cum dividend"?

An increase in share price following an increase in dividends is logical if the:

Dividend policy is a trade-off between ___________ and ___________.

An assumption of the MM dividend irrelevance proposition is:

If the total assets of a firm are unaffected by a stock dividend, then:

XYZ Corp.has 1,000 shares outstanding and retained earnings of $25,000.Theoretically, what would you expect to happen to the price of their stock, currently selling for $30 per share, if a 25% stock dividend is declared?

When a corporation engages in a 10% stock repurchase, it:

With a stock repurchase:

Use your knowledge of current corporate tax laws to show that a preferred stock with a 9% dividend might be preferred to a common stock having a 13% capital gain.