FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 16: Dividend and Other Payouts

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Multiple Choice

Review LaterAdd Note

Review Later

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:

A) information content effect.
B) efficient markets hypothesis.
C) clientele effect.
D) MM Proposition I.
E) MM Proposition II.

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

On May 18^th,you purchased 1,000 shares of BuyLo stock.On June 5^th,you sold 200 shares of this stock for $21 a share.You sold an additional 400 shares on July 8^th at a price of $22.50 a share.The company declared a $.50 per share dividend on June 25^th to holders of record as of Thursday,July 10^th.This dividend is payable on July 31^st.How much dividend income will you receive on July 31^st as a result of your ownership of BuyLo stock?

A) $100
B) $200
C) $300
D) $400
E) $500

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

The Retail Outlet has 6,000 shares of stock outstanding with a par value of $1.00 per share.The current market value of the firm is $420,000.The balance sheet shows the capital in excess of par account value of $136,000 and retained earnings of $234,000.The company just announced a 2-for-1 stock split.What will the retained earnings account balance be after the split?

The High-Div Company is paying a $1.50 per share dividend today.There are 200,000 shares outstanding with a par value of $1.00 per share.As a result of this dividend,the:

Financial managers:

If you ignore taxes and transaction costs,a stock repurchase will: I.reduce the total assets of a firm. II.increase the earnings per share. III.reduce the PE ratio more than an equivalent stock dividend. IV.reduce the total equity of a firm.

The use of homemade dividends allows stockholders to change the:

You own 300 shares of Abco,Inc.stock.The company has stated that it plans on issuing a dividend of $.60 a share one year from today and then issuing a final liquidating dividend of $2.20 a share two years from today.Your required rate of return is 10%.Ignoring taxes,what is the value of one share of this stock today?

Bruno's has 7,000 shares of stock outstanding with a par value of $1.00 per share and a market value of $12 per share.The balance sheet shows $7,000 in the common stock account,$87,000 in the capital in excess of par account and $32,500 in the retained earnings account.The firm just announced a 50% (large) stock dividend.What is the value of the capital in excess of par account after the dividend?

The Tinslow Co.has 125,000 shares of stock outstanding at a market price of $93 a share.The company has just announced a 5-for-3 stock split.How many shares of stock will be outstanding after the split?

A reverse split is when:

The date by which a stockholder must be registered on the firm's roll as having share ownership in order to receive a declared dividend is called the:

On May 18^th,you purchased 1,000 shares of Sanders stock.On June 5^th,you sold 300 shares of this stock for $21 a share.You sold an additional 400 shares on July 8^th at a price of $22.50 a share.The company declared a $.15 per share dividend on June 25^th to holders of record as of Thursday,July 10^th.This dividend is payable on July 31^st.How much dividend income will you receive on July 31^st as a result of your ownership of BuyLo stock?

Murphy's,Inc.has 10,000 shares of stock outstanding with a par value of $1.00 per share.The market value is $8 per share.The balance sheet shows $32,500 in the capital in excess of par account,$10,000 in the common stock account and $42,700 in the retained earnings account.The firm just announced a 10% (small) stock dividend.What will the market price per share be after the dividend?

On the date of record the stock price drop is:

A _____ is an alternative method to cash dividends which is used to pay out a firm's earnings to shareholders.

The Tinslow Co.has 125,000 shares of stock outstanding at a market price of $93 a share.The company has just announced a 7-for-3 stock split.What will the market price per share be after the split?

Payments made by a firm to its owners from sources other than current or accumulated earnings are called:

It has been shown that in the absence of taxes and other market imperfections firm value will be unaffected by dividend policy.Explain the logic behind this conclusion.Next,describe three real-world factors that may cause one dividend policy to be preferable to another.

All else equal,a stock dividend will _____ the number of shares outstanding and _______ the value per share.