Exam 17: Payout Policy

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?

Corporations may have a legitimate preference for dividends over capital gains because:

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

A policy of dividend "smoothing" refers to:

An assumption of the MM dividend irrelevance proposition is that:

MM's proposition of dividend irrelevance depends upon:

After the payment of a 25% stock dividend, an investor has 500 shares of stock and $400 cash. What did the investor have prior to the stock dividend?

Automatic dividend reinvestment plans allow firms to:

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

Which one of these parties is most apt to prefer a stock with a low-dividend payout policy?

A stock is currently priced at $65 per share and will pay a $4 dividend in one year. What must the stock sell for in one year to meet investors' expectations of a 15% after-tax yield if dividends are taxed at 28%? Ignore capital gains taxes due to investor timing.

Both a stock split and a stock dividend will result in an increase in:

Why would payout decisions be used by management to signal the prospects of the firm?

Dividend changes are typically viewed by investors as signals of future changes in:

The date on which actual dividend checks are mailed to shareholders is the:

For the period 2003 to 2012, more than half of U.S. corporations did not pay a dividend nor did they repurchase shares.

You currently own 80 shares of XYZ stock that is selling for $40 a share. If the firm grants you an additional 4 shares, then the firm has declared a:

Which one of these firms would you most expect to have the highest payout percentage?

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.

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.