Exam 16: Dividend Policy

According to the residual dividend payout policy,dividends are considered a residual after

A stock split will cause changes in the dollar value of which of the following?

ZZZ Corporation has declared a stock dividend that pays one share of stock for every 10 shares owned.What will happen to EPS immediately upon the distribution of the stock dividend?

In the absence of taxes or transaction costs,investors

We typically expect to find rapidly growing firms to have high payout ratios.

The clientele effect suggests that firms can change their dividend policy frequently with no potential adverse effect on the firm.

Use the following information to answer the following question(s). Your firm is planning a 2 for 1 stock split.The market price for the stock has been $84.The table below presents the equity portion of your firm's balance sheet before the split. Common stock Par value (1 million shares outstanding;$4 par value)$ 4,000,000 Paid-in capital 16,000,000 Retained earnings 30,000,000 Total equity $50,000,000 -After the stock split,the number of shares outstanding,their par value and the total common stock account will stand at

The problem with the residual dividend policy ratio is

Dividend policy is influenced by

Which of the following considerations would be expected to influence a firm's decision regarding the payment of dividends?

Which of the following is most likely to have a negative impact on stock price?

Due to the strengthening of the stock market over the past 50 years,stock splits and stock dividends are more common than cash dividends.

If investor's expect a 15% rate of return on their investment,they will be indifferent between a $1.00 dividend received immediately or

The ________ designates the date on which the stock transfer books are closed in regard to a dividend payment.

Which of the following motivates corporations to split their common stock?

There is absolutely no difference on an economic basis between a stock dividend and a stock split.

Trevor Co.'s future earnings for the next four years are predicted below.Assuming there are 500,000 shares outstanding,what will the yearly dividend per share be if the dividend policy is as follows? a.A constant payout ratio of 40% b.Stable dollar dividend targeted at 40% of the average earnings over the four-year period c.Small,regular dividend of $0.75 plus a year-end extra of 40% of profits exceeding $1 million Trevor Co. Year 1 $ 900,000 Year 2 1,200,000 Year 3 850,000 Year 4 1,350,000

Dividends tend to be higher for firms with stable earnings.

The ex-dividend date occurs prior to the declaration date.

ZZZ Corporation had net income of $100 million last year and 50 million common shares outstanding.They declared an 8% stock dividend.Calculate EPS before and after the stock dividend.