Exam 14: Payout Policy

In a Dutch auction, ________.

The problem with a constant-payout-ratio dividend policy from the shareholders' perspective is that ________.

The Jobs and Growth Tax Relief Reconciliation Act of 2009 significantly changed the tax treatment of corporate dividends for most taxpayers by dropping the tax rate to the rate applicable on capital gains, which is a maximum rate of 25%.

Tender offer repurchase is a repurchase program in which a firm ________.

A firm that has a large percentage of ________ investors may pay out a lower percentage of its earnings as dividends.

Gordon and Lintner, recognizing that dividends affect stock prices, suggest that positive effects of dividend increases are attributable ________.

If a firm's earnings remain constant and total cash dividends do not increase, a stock dividend results in a lower per-share market value for the firm's stock.

Tangshan Mining has common stock at par of $200,000, paid-in capital in excess of par of $400,000, and retained earnings of $280,000. In states where the firm's legal capital is defined as the total of par value and paid-in capital in excess of par, the firm could pay out ________ in cash dividends without impairing its capital.

Which of the following type of firms are most likely to payout cash dividends?

Which of the following methods can be utilized by a firm when it wants to purchase outstanding shares of common stock?

In a(n) ________, a firm specifies a range of prices that it is willing to repurchase shares and the quantity of shares that it desires.

An advantage of a ________ is that it avoids giving shareholders false hopes.

The net effect of a stock repurchase is ________.

The payment of cash dividends to corporate stockholders is decided by the ________.

Tangshan Mining has 100,000 shares outstanding and just declared a 3-for-2 stock split. Before the announcement, the firm's shares were trading at $50.00 per share. After the stock split, the firm's shares should trade at ________ per share.

The dividend policy must be formulated considering two basic objectives, namely ________.

The residual theory of dividends implies that if a firm's available retained earnings are in excess of its financing needs, it should distribute the earnings by paying dividends to stockholders.

Which of the following is true of a dividend payout?

Reverse stock splits are initiated when a stock is selling at a very low price to appear respectable.

The bird-in-the-hand argument espousing the importance of dividends or dividend relevance suggests that investors view current dividends as less risky than future dividends or capital gains.