FINC 522 Module 6
Which of the following is a method of payment a corporation can use to pay a dividend?
All of these answers.
Which of the following is a possible market reaction to a stock repurchase announcment?
All of these answers.
Which of the following is a reason a company might have for initiating a reverse stock split?
All of these answers.
Which of the following is a shareholder benefit associated with a dividend reinvestment program? (DRIP)
All of these answers.
Which of the following is an element of a company's dividend policy?
All of these answers.
Which of the following statements is true about companies that pay a high dividend?
All of these answers.
Which of the following statements regarding the clientele effect's influence on stock price is true?
All of these answers.
Which of the following is a possible market reaction to a company's announcement that it will increase it's quarterly dividend?
The share price may increase because the increased dividend signals that future earnings will be higher than the market currently expects.
Which of the following changes after a stock splits?
The stock's price per share
Under the Modigliani-Miller theorem in finance, the value of a company depends on:
the competitive situation of the company and the projects that the company undertakes and plans.
Which of the following is a drawback of share repurchase for shareholders?
All of these answers.
Which of the following accurately describes how a stock dividend differs from a stock split?
A stock dividend is paid using already issued shares; a split requires new shares to be issued.
The Modigliani-Miller theory suggests that it doesn't matter to a shareholder whether a company issues dividends. Why might that theory not be applicable to the US stock market as it currently exists?
All of these answers.
Which of the following influences how a dividend is reported on a company's books?
All of these answers.
Which of the following is a benefit of a company paying a smaller dividend?
All of these answers.
Which of the following statements regarding what dividends can mean to prospective investors is true?
Dividends provide consistent returns on relatively low risk investments.
Which of the following repurchasing method definitions is NOT correct?
Repurchase Put Right: The firm announces that it will repurchase a number of shares at a set price.
Which of the following is a benefit shareholders can obtain by repurchasing its shares?
Shareholders have a higher percent ownership in the company at higher price per share.
The following journal entry would account for which of the following transactions? Dr. Retained Earnings, Cr. Common Stock, Cr. Paid-in capital
Stock dividends
Which of the following statements regarding what dividends can mean to prospective investors is true?
Stocks with consistently high dividends tend to mitigate agency conflicts between investors and firm management.
In which of the following situations would a shareholder prefer to receive stock dividends as opposed to cash dividends?
The investor is looking to own shares in the company for a long period of time.
Which of the following is NOT something that can be assumed about a stock based on a dividend accouncement?
When a company's dividends steadily grown, this confirms the financial strength of the company.
Which of the following is an accurate description of one of the dates related to issuing dividends:
the declaration date is the day the board of directors announces it will pay a dividend.
