Exam 19: Dividends and Other Payouts

You purchased 200 shares of ABC stock on July 15th.On July 20th,you purchased another 100 shares and then on July 22nd you purchased your final 200 shares of ABC stock.The company declared a dividend of $1.10 a share on July 5th to holders of record on Friday,July 23rd.The dividend is payable on July 31st.How much dividend income will you receive on July 31st from ABC?

The last date on which you can purchase shares of stock and still receive the dividend is the date ________ business day(s)prior to the date of record.

The Cameron Co.is paying a dividend of $.82 a share today.There are 120,000 shares outstanding with a par value of $1 per share.As a result of this dividend,the:

Leslie purchased 100 shares of GT stock on June 7th.Marti purchased 100 shares of GT stock on Monday,July 9th.GT declared a dividend on June 20th to shareholders of record on July 13th that is payable on August 1st.Which one of the following statements concerning the dividend paid on August 1st is correct given this information?

In a reverse stock split the:

The observed empirical fact that stocks attract particular investors based on the firm's dividend policy and the resulting tax impact on investors is called the:

Assume you own 300 shares of ABC stock and receive a stock dividend of 5 percent.As a result,the number of shares you own will change to ________ shares while your total wealth will increase by ________ percent.

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

Schaeffer Shippers announced on May 1 that it will pay a dividend of $1.20 per share on June 15 to all holders of record as of May 31st.The firm's stock price closed today at $42 a share.Assume all investors are in the 22 percent tax bracket.If tomorrow is the ex-dividend date,what would you expect the opening price to be tomorrow morning assuming all else is held constant?

Ignoring taxes and all else held constant,the market value of a stock should decrease by the amount of the dividend on the:

The Retail Outlet has 8,000 shares of stock outstanding with a par value of $1 per share.The current market value of the firm is $620,000.The balance sheet shows a capital in excess of par account value of $66,000 and retained earnings of $234,000.The company just announced a 3-for-1 stock split.What will be the retained earnings account balance after the split?

Deep Water Drilling has 160,000 shares of stock outstanding at a market price of $109 a share.The company has just announced a 7-for-3 stock split.What will be the market price per share after the split?

Ignore commissions,taxes,and other imperfections.If a firm substitutes a repurchase for a cash dividend,the primary difference will be an increase in the:

Which one of the following is not a reason why firms choose repurchases rather than dividends?

DD&L has a market value equal to its book value,excess cash of $400,other assets of $7,600,equity of $8,000,200 shares of stock outstanding,and net income of $900.The firm has decided to pay out all its excess cash as a cash dividend.What will be the earnings per share after the dividend is paid?

Priscilla owns 500 shares of Deltona stock.It is January 1,2018,and the company recently issued a statement that it will pay a $1 per share dividend on December 31,2018,a $2.50 per share dividend on December 31,2019,and then cease all dividend payments.Priscilla does not want any dividend income this year but does want as much dividend income as possible next year.Priscilla can earn 8 percent on her investments.Ignoring taxes,what will Priscilla's homemade dividend per share be in 2019?

Assume personal tax rates are lower than corporate tax rates.From a tax-paying shareholder point of view,how should a firm spend its excess cash once it has funded all positive net present value projects?

Robinson's has 15,000 shares of stock outstanding with a par value of $1 per share and a market price of $36 a share.How many shares of stock will be outstanding of the firm does a 3-for-2 stock split?

The ability of shareholders to undo the dividend policy of a firm and create an alternative dividend payment policy via reinvesting dividends or selling shares of stock is referred to as:

Bob's Auto Group has 25,000 shares of stock outstanding at a market price of $4.50 a share.What will be the market price per share if the company does a 1-for-5 reverse stock split?